Post-Crisis FDI Inflows to ASEAN

ASEAN-OECD Investment Policy Conference 18-19 November 2010 ASEAN Secretariat

Outline of the Presentation
Brief overview of global and ASEAN growth

prospects, and global FDI inflows
ASEAN FDI inflows post-crisis Looking forward: 2010 and beyond

Key issue/challenge and policy options
2

Note: Forecast for 2010-2011.0 Source: IMF (2010). p.13. Asian Development Outlook 2010 Update.0 15. Table A1.Global and ASEAN output growth (In percent) ASEAN Brunei Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines 2009 2010 2011 Singapore Thailand Viet Nam -5. Source of basic data: ADB (2010).0 5. 3 . World Economic Outlook October 2010.0 10.19. 175. p.0 0. Figure 1.

1. 4 . Second and Third Quarters of 2010. Global Investment Trends Monitor.Global FDI inflows (in billion USD) Source: UNCTAD (2010b). Fig. p. 1.

2000-2009 (in million USD) Source: ASEAN Secretariat FDI Database 5 .A S EA N FDI Po s t-Cris is Total FDI inflows to ASEAN.

6 .A S EA N FDI Po s t-Cris is FDI inflows to ASEAN Member States. 2007-2009a (in million USD) Source: ASEAN Secretariat FDI Database . Note: a Data for Brunei Darussalam and Myanmar are for the first half of 2009.

A S EA N FDI Po s t-Cris is FDI inflows to ASEAN by economic sector. 2000-2009 (in percent) 7 .

8 . 2005-2009 (in million USD) Source: ASEAN Secretariat FDI Database .A S EA N FDI Po s t-Cris is Breakdown of FDI inflows to the services sector.

9 3.0 11.0 3.246.439.297.8 18.623.6 317.8 1.657.6 13.0 1.6 4.491.2 -0.0 9 Source: ASEAN Secretariat FDI Database.4 1.7 1.9 23.509.A S EA N FDI Po s t-Cris is FDI inflows to ASEAN by source country. .828.1 1.5 100.4 2.5 -165.4 3.5 394.755.159. 2006-2009 (in million USD) 2006 Source Countries ASEAN Australia Canada China European Union India Japan Republic of Korea New Zealand United States Others ASEAN Total Value (mil USD) 7.2 983.8 Share (%) 21.067.682.2 -0.7 2.466.5 1.0 10.7 0.9 700.109.1 698.3 19.8 100.2 49.045.8 29.782.6 13.3 Share (%) 13.7 799.2 8.1 10.4 3.583.499.3 23.357.0 255.4 34.1 39.395.684.3 19.9 Share (%) 13.4 2.308.6 0.0 2008 Value (mil USD) 10.8 0.0 Share (%) 11.7 8.421.5 1.8 239.5 7.9 1.3 17.4 27.9 310.0 2007 Value (mil USD) 9.765.5 2.3 -209.4 5.132.8 100.1 1.2 74.6 4.354.9 3.5 35.5 2.8 100.6 0.9 2.6 0.0 2009 Value (mil USD) 4.4 9.8 0.0 -282.461.6 22.8 3.5 919.5 13.0 1.7 14.609.5 100.428.199.2 1.9 1.018.4 56.0 2.1 5.715.6 5.2 1.520.5 18.5 9.3 10.6 8.064.4 -0.

70 0.53 592.10 4.00 0.45 0.50 -1.76 11.00 0.00 7.79 0.53 18.87 68.37 6.45 0.528.32 16.07 57.00 0.47 20.90 82.30 0. .00 315.00 0.07 50.22 96.33 0.33 -269.56 0.22 0.72 0.00 -315.00 16.72 4.68 2.50 59.10 0.00 0.51 2.00 0.00 0.00 0.00 -5.319.08 0.00 0.00 0.24 0.84 1.42 -0.00 0.75 29.00 0.00 2.00 0.15 1.A S EA N FDI Po s t-Cris is Intra-ASEAN FDI Inflows.89 23.70 -467.38 0.00 312.01 0.69 0.57 0.USD) Host Country Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapor Thailand Viet Nam TOTAL e Source Country Brunei Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam 0.00 0.49 920.00 -2.63 66.00 55.77 428.00 0.91 0.00 0.037.20 -370.00 0.09 170.00 0.97 9.15 15.00 0.01 0.00 0.42 1.00 1.00 0.428.88 1.60 TOTAL ASEAN 0.72 66.00 0.00 1.00 0.78 0.00 0.00 23.60 -29.00 4.91 10 Source: ASEAN Secretariat FDI Database .00 0.33 547.30 937.015.00 0.00 872.41 6.47 0.00 5.00 0.42 23.380.00 0.60 65.96 -226.10 0.00 1.86 0.00 15.00 2.07 0.00 0.73 19.60 585.00 15.07 17. 2009 (in mil.05 0.40 7.54 9.21 0.

A S EA N FDI Inf low s Po s t -Cris is Intra-ASEAN FDI inflows. 11 . 20002009 (in million USD and percent share of total FDI inflows) Source: ASEAN Secretariat FDI Database .

20 40 60 80 100 Source of basic data: ASEAN Secretariat FDI Database. 12 .FDI inflows as a ratio of GDP and gross fixed capital formation (in percent) FDI inflows as % of GDP Total ASEAN Viet Nam Thailand Singapore FDI inflows as % of gross fixed capital formation Viet Nam Thailand Singapore Philippines Myanmar Malaysia 2007 2008 2009 Philippines Myanmar Malaysia Lao PDR Indonesia Cambodia Brunei Darussalam 0 5 10 15 20 25 Lao PDR Indonesia Cambodia Brunei Darussalam 0 Source: UNCTAD.

13 .  Developing country TNCs in Asia more optimistic than those from developed economies.  WIPS 2010-2011 (conducted in Feb-May 2010)  36% pessimistic about global environment in 2010. 19% (-) in 2010.  33% (+).  43% (+). 58% (+). including SEA. 19% (-) in 2011. 50% (+). 16/15% (-) in 20112012.  Bullish about developing Asian region. 41% (-) in 2010.Looking Forward: 2010 and Beyond Surveys of TNCs’ planned investment expenditures  WIPS 2009-2011 (conducted in Feb and May 2009)  47% pessimistic about global environment in 2010.

Note: Numbers in parentheses before the name of selected countries are their rankings in 2009. page 13. World Investment Prospects Survey 2010-2012. 14 .Looking Forward: 2010 and Beyond Top host economies for FDI in 2010–2012 Source: UNCTAD (2010a). figure 14.

Other factors: cheap labour.Looking Forward: 2010 and Beyond Factors driving FDI based on TNCs surveys: 1. natural resources . Market factors a) b) c) Local market size Market growth Access to regional/international markets 2. Factors relating to the quality of the overall business environment a) b) c) d) e) Presence of suppliers/partners. Business-friendly environment Availability of skilled labour Quality of infrastructure Government effectiveness 15 3.

permitting and property registration for small and medium-size firms and improving credit information sharing. Indonesia (121). Malaysia     (21). Emerging-market economies such as Indonesia. Vietnam (78). Lao PDR (171). Cambodia (147). Thailand (19). Malaysia ranked first in terms of getting credit. and improved contract enforcement.Key Issue: Competitiveness Doing Business 2011  Singapore retains the top ranking. Vietnam (4th) and Brunei Darussalam (10th) in the top 10 economies that improved the most in the ease of doing business 2009/2010. China and India also made significant changes over time. Brunei Darussalam (112). Malaysia and Vietnam took the lead in easing start-up. 16 . Philippines (148).

Average for ASEAN Innovation Institutions 7 6 5 Business Sophistication 4 3 2 1 Market Size 0 Health and Primary Education Macroeconomy Infrastructure Technological Readiness Financial Market Sophistication Labour Market Efficiency Higher Education and Training Goods Market Efficiency 17 .Key Issue: Competitiveness Measuring competitiveness in ASEAN: Global Competitiveness Index (GCI).

3.1.2. Upgrade labor quality and infrastructure 1. Enhance institutional predictability Transparent policies/rules and enforcement ii. Enhanced role for investment promotion agencies i. 18 . Maintain macroeconomic stability 1. Enhance investment environment in individual AMS by further improving competitivenss: 1.Some policy options 1.

2. Empowering the ACIA 19 . Improve investment facilitation 2. 2.Some policy options 2. Enhance intra-ASEAN FDI.4.3. Deepening regional market integration 2. Further investment liberalisation 2.1.

감사합니다 Maraming Salamat!!! Terima Kasih ขอบคุณครับ ありがとう Cảm ơn rất nhiều ຂອບໃຈຫລາຍໆ 謝謝你。 THANK YOU !!! 20 .

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