(EGM) Foreign Direct Investment in Southeast Asia - Unido

attractiveness of the region to investors; and ultimately iv) making a
contribution to the consolidation of a robust regional economy.
Southeast Asia’s success in this regard is highly dependent on individual
countries making the commitment to develop endogenous industries and
creating a favourable investment environment. ASEAN member countries
need to collaborate in moving towards greater integration, so as to reap the
full benefits of SDPNs. This includes moving towards a model of regional
industrial policy, and providing support at the firm level to all companies,
whether they perceive the region as a market, or a production base. There is
also a need to increase activity in the field of more innovative FDI, through
the development of human resources and skills. Tellingly, there is relatively
little fundamental research and development FDI activity undertaken by
MNEs operating in Southeast Asia.
Commentary and discussion
There is a trend towards what one might call “network capitalism”, noted
Hafiz Mirza, bringing with it new sources of foreign investment activity, and
different ways that individual companies enact investment. For example, the
typical way that a British company goes about enacting an FDI project tends
to be quite different from the approach adopted by most German firms.
There is a need to think beyond simply national FDI policies, and look at
regional strategies, clusters and partnering. Such new developments as the
ASEAN-China and ASEAN-Japan agreements are signs of this trend
developing, and are in some ways a response to the increasingly fine ‘slicing
and dicing’ of production stages, through regional networks and partnerships.
However, many developing countries find themselves confronted with a
difficult dilemma. On the one hand, commitments made as part of WTO
membership, and other agreements, tend to call for open markets and a
level playing field for both domestic and foreign investors. This is broadly
supported by consumers, which object to protective practices that often
result in higher prices for goods and services, and the need for a country to
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