(EGM) Foreign Direct Investment in Southeast Asia - Unido

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‘pipeline’ of harmonising legislation to increase policy coherence was clearly a step in the right direction. The fragmented and small national markets within the region called for greater, not less, regionalisation, so that sectors within countries would be better enabled to diversify within the integrated global factory, and thereby seek specialisation within MNEs’ production networks. Regional co-operation at the institutional level is essential to permit industrial collaboration (and competition) at the micro-economic level. And in this respect, the conditions for attracting FDI need to be sustainable for FDI to gain traction with increasingly specialised domestic sectors. The high commonality of challenges implied that gains can be made through co-operation between IPAs across the region, in sharing their responses and pursuing ‘regional best practices’. The national distinctiveness in revealed comparative advantages and created assets also point to gains from further regional division of labour, although it was acknowledged that the danger of ‘over competition’ and a ‘race to the bottom’ through incentives wars could, and should, be avoided through regionalism. Second presentation summary Atchaka Brimble of Thailand’s BOI portrayed the changing characteristics of the Thai experience of FDI, highlighting in particular the global and regional asymmetries in FDI flows, and the FDI performance of the country relative to other recipients in the Asia Pacific area. Thailand is currently enjoying renewed interest by investors, with the ‘Triad economies’ as leading sources of FDI; and Singapore, Malaysia and Taiwan province of China as the predominant regional sources of FDI inflows for Thailand. The investment promotion (IP) strategy of Thailand was seen to focus on the leading variables of FDI benchmarking studies, through both short- and long- term plans. Coupled with this re-orientation was greater attention to attract higher-value added and technologically-intense FDI, in recognition of the need to shift rapidly away from low- and medium-technology, and towards 18
high-technology cluster development. A pressing issue emphasised was the speed and management of the change, which was governed by institutional development and constraints therein. A recognition of the role of the knowledge-based economy was factored into upgrading skills and investing in innovation as an essential component of investment promotion. The presentation described a spatial initiative, whereby the clustering and value-chain components of investment promotion could be fully developed, principally by targeting specific investors in auto, agri-business, information communications technology (ICT), fashion, biomass, and providing services outsourcing. Commentary and discussion Frank Bartels noted the widening of the FDI ownership base, which pointed to increasing competitiveness across domestic sectors. This presaged future intensification of backward and forward linkages, albeit only if advancing up the value-chain can be matched by policy craft dedicated to upgrading the skills sought by investors. Also crucially important is the need to create ‘locational assets’ that will enable exports to diversify, in terms of both product category and destination, away from electronics and the Triad countries respectively, so as to increase specialisation. It was noted that the evolution of Thailand’s experience in FDI placed increasing demands on policy analysis and research with respect to the ‘drivers’ of industrial development. The customisation of incentives for government prioritised strategic cluster development was noted as vitally necessary, not only for inward FDI, but also outward FDI. This customisation, at least in some countries of the region, is being performed at the provincial level. This raises the thorny issue of the efficacy of investment incentives, and the potential for competing for FDI purely through incentive packages. While available ‘best practice’ provides guides to IPA organisation and management, the key provision of adapting best practices to meet specific national (and local) conditions is a 19
Page 3: Foreign Direct Investment in Southe
Page 6 and 7: Abbreviations and Acronyms ADB Asia
Page 8 and 9: thinkers and writers on FDI and mat
Page 10 and 11: The realignment of structural facto
Page 12 and 13: Recent years have seen increasing c
Page 14 and 15: overlap according to production pro
Page 16 and 17: enchmark rankings should be one aim
Page 18 and 19: Theme 2 FDI and National Experience
Page 22 and 23: major determinant of success. This
Page 24 and 25: and viii) general foreign investor
Page 26 and 27: Investment policy craft -- creating
Page 28 and 29: policies, as they would treat forei
Page 30 and 31: It appears that the advantages and
Page 32 and 33: seeking to attract FDI? Examining t
Page 34 and 35: attractiveness of the region to inv
Page 36 and 37: Theme 4 FDI and the China Dimension
Page 38 and 39: greater regional collaboration, the
Page 40 and 41: The increasing significance of outs
Page 42 and 43: aise their own finance like any oth
Page 44 and 45: Notwithstanding the dynamics of ris
Page 46 and 47: The logistics of the UNIDO ITPO Del
Page 48 and 49: no longer be an appropriate indicat
Page 50 and 51: FDI lens. Consequently, some IPAs h
Page 52 and 53: Select References Bartels F.L. and
Page 54 and 55: Annex 2: Participants at the EGM Co
Page 56 and 57: Appendix I: Thematic Programme of t
Page 58 and 59: 12.30-14.0 Lunch Plenary Discussion
Page 60 and 61: Appendix II: Opening Statement by t
Page 62 and 63: Appendix III: Opening Statement by
Page 64 and 65: and practitioners in other developi
Page 66 and 67: The themes of the EGM have been car
Page 68 and 69: Appendix V: EGM Working Paper EF Un
Page 70 and 71:
ABSTRACT This working paper discuss
Page 72 and 73:
In recent years, we have seen incre
Page 74 and 75:
usiness domestically (improving int
Page 76 and 77:
intra-industry trade, which account
Page 78 and 79:
The agglomeration of markets and di
Page 80 and 81:
These patterns are characterised by
Page 82 and 83:
etween locations and maximises the
Page 84 and 85:
ecome insiders and thus avoid being
Page 86 and 87:
(iv) Those that relate to the “pu
Page 88 and 89:
their indicators 50 of industrial p
Page 90 and 91:
evolve more rapidly to account for
Page 92 and 93:
changing morphology of MNEs with a
Page 94 and 95:
92 Appendix I - Doing Business in A
Page 96 and 97:
94 Appendix II - ASEAN Investment C
Page 98 and 99:
96 Appendix III - Ranking of Econom
Page 100 and 101:
Buckley P. J., Carter M. J., 2004,
Page 102 and 103:
McKinsey & Company, 2003, New Horiz
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(EGM) Foreign Direct Investment in Southeast Asia - Unido

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