i. Ministers welcomed signs of an improving global economic environment.  World economic growth is expected to increase to over 4% in 2010 and 2011. Leading the economic recovery are the economies of developing Asia, particularly key economies in the region such as China, India, and the ASEAN Member States. The forecast for ASEAN’s real GDP growth in 2010 is over 5%, compared with 1.5% in 2009.

ii. Ministers anticipate higher foreign direct investment inflows into ASEAN in 2010 and beyond, after a downturn in 2008 and 2009.  This is borne out by UNCTAD estimates of an increase of global FDI flows to US$1.2 trillion in 2010 and to US$1.3-1.5 trillion in 2011. Nevertheless, Ministers recognized that FDI prospects are dependent on global recovery conditions.

iii. ASEAN’s share of total global FDI inflows increased to 3.6% in 2009, from 2.8% in 2008, despite the recent economic downturn.  This reflects well of the ASEAN region in terms of its ability to continue to attract a higher share of investment flows, despite the lower overall value of FDI inflows of US$39.6 billion in 2009.

iv. The main sources of FDI inflows to ASEAN remained the European Union with a share of 18.3%, Japan (13.4%), and the United States (8.5%).  Of significance are the inflows from intra-ASEAN sources, which accounted for 11.2% of ASEAN inflows in 2009, making ASEAN itself the third largest source of investment for the region.

v. The services sector continued to account for the highest levels of FDI inflows, amounting to US$26.8 billion or 68% of total ASEAN FDI inflows in 2009. The main sub-sectors in the services include trade, real estates and financial intermediation which accounted for 15%, 32% and 27% respectively of the total FDI flows into the services sector.  The manufacturing sector was second with US$8.5 billion or 22% of total FDI flows. The mining and quarrying sector accounted for US$3.2 billion which is 8% of the total FDI flows into ASEAN.

vi. To further attract FDI flows, Ministers agreed to progress work to facilitate greater ASEAN investment flows through joint investment promotions, advancing work on best practices on investment and engaging the private sector in further consultations to obtain feedback on improving the ASEAN investment climate. 

vii. Ministers agreed to explore the utility of doing joint investment promotion.

Statistics used in this Joint Media Statement are sourced from ASEAN Statistics, IMF World Economic Outlook and UNCTAD Investment Report. All data are as of July 2010.