JAKARTA (Feb 19) — Foreign direct investment (FDI) in Southeast Asia increased marginally in the first half of last year compared to the same period in 2001, according to the latest statistics by the ASEAN Secretariat.
FDI flows to ASEAN based on the balance of payment in the first half of 2002 totaled US$1.95 billion, up from US$1.94 billion in 2001, showing resilience in the light of the global FDI slowdown. But these figures exclude Singapore and Myanmar, which do not record half-yearly FDI data. The Philippines, Malaysia and Vietnam topped the other ASEAN countries in attracting FDI inflows during this period, drawing in US$1.3 billion, US$730 million and US$450 million respectively.
The top three foreign investors in ASEAN in the first half of last year were Japan with US$740 million worth of investments, with the United Kingdom in second place at US$260 million, and Singapore at US$175. Investments from the United States, which has been been the largest overall investor to ASEAN in the past few years including 2001 with US$3.1 billion, was not taken into account as their investments in Singapore were not reflected in the half-yearly statistics as Singapore collates FDI data only on an annual basis, thereby placing the U.S. outside of the Top Ten foreign investors for the first half of last year.
FDI IN ASEAN (BOP BASIS)
1998 -1ST half of 2002
(in US$ million)
|Countries||1997||1998||1999||2000||2001||1st half 2002|
Source: ASEAN Secretariat FDI Database
Data compiled from the respective ASEAN Central Banks and Central Statistical Offices.
Note: – stands for disinvestments
Japan’s investments in ASEAN were mainly in the electronics and automotive sectors as it capitalizes on economic incentives like the ASEAN Investment Area (AIA), ASEAN Industrial Cooperation (AICO) and the ASEAN Free Trade Area (AFTA) which offer complementary advantages of production in regional locations, economies of scale and efficiency, and market potential for its products and services in the region.
ASEAN Secretariat’s Director of Economic Cooperation Noordin Azhari said the slight growth in FDI has indicated an ability to arrest the downward trend of investment flows, with the decline in global FDI stock.
“Small FDI growth within ASEAN is better than negative growth,” said Mr. Noordin. “We have to continue generating internal growth so that ASEAN countries can forge ahead and at the same time, be able to attract greater investment inflows.”
Mr. Noordin said external market conditions in the globalized economy have a strong influence on ASEAN and thus, member countries must develop a resilient domestic economy that can withstand external factors.
“We have to proceed with regional economic integration through AFTA, by reducing tariff and non-tariff barriers and enhancing trade facilitation by harmonizing standards and Customs procedures to generate intra-ASEAN trade and investments,” said Mr. Noordin.
“These measures will spur economic growth and help attract FDI inflows, with regional peace and stability.”