(EGM) Foreign Direct Investment in Southeast Asia - Unido

Recent years have seen increasing competition between countries to attract
and host finite FDI flows. But the challenge for policy-makers is not just
about attracting a greater share of FDI inflows, but also harnessing it to
optimal effect. International experience provides some lessons on optimal
policy designs and instruments (and their implementation). However, the
topic remains the subject of continuing and continual research and analyses,
not least because FDI activity itself (both in manufacturing and services) is in
a state of permanent evolution and change. For example, the steady rise of
global value chains and global production networks, briefly depicted above,
has become an increasing source of interest. For policy-makers, the key
question is: how can a country best position itself to take advantage of this
new phenomenon? While policy instruments that proved effective in
attracting and harnessing FDI yesterday may prove less effective today (and
tomorrow), new instruments may be part of the answer.
It is in this context that a UNIDO expert group meeting (EGM) was
conceptualised and conducted; using the experience of Southeast Asia as a
lens through which to depict and debate the challenges currently confronting
developing countries in successfully attracting and best harnessing FDI
inflows. The Southeast Asian region spans a diverse range of countries, at
very different stages of economic development and transition, and therefore
serves as a useful object of study for most developing countries [Freeman
and Bartels (2004)]. This report is intended to serve as a summary of the
EGM’s presentations and discussions.
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