(EGM) Foreign Direct Investment in Southeast Asia - Unido

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The increasing significance of outsourcing (of both production and services) associated with FDI, and as a substitute for FDI, implies that the emergence of ‘campuses of manufacturing’ (evolving from industrial parks) needs to be factored into investment promotion policies. Cluster development in relation to knowledge-based institutions would be a significant determinant of attracting FDI. In addition, FDI targeting policies need to account for specific ‘types’ of FDI outsourcing by leading MNEs. Commentary and discussion Peter Buckley noted that national competition and corporate complementarities in FDI posed challenges for policy craft. Policies need to address whether MNEs strategies are evolving globally or regionally. In general, analysis points to MNEs strategies in EU, North America as regional, in contrast to those in Asia as global (exports from Asia to the rest of the world). Campuses of manufacturing could be viewed as new growth poles, which could attract outsourcing manufacturing services providers. As a consequence, regional policy coherence is of vital importance in reducing the policy temptations of competing for FDI through incentive wars. Contemporaneously, ASEAN ‘could do better’ in terms of perceptions of the quality of governance in the region. Additionally, the perceived low capacity levels of IPAs were a matter for urgent attention among policy-makers. The difficulties posed by bilateral trade agreements (BTAs), bilateral investment treaties (BITs), double taxation treaties (DTTs) with regional trade agreements (RTAs) was recognised as requiring increased policy resources, with the caveat that BTAs can often skew resource allocations. 38
Theme 5 FDI and Capital in Southeast Asia First presentation summary The presentation by Nick Freeman took the perspective of Southeast Asia’s transitional countries, which together are seeking to establish robust and sustainable market-oriented economies. This includes eradicating poverty, partly through job creation, and starting to catch up with the industrial development trajectories seen in the region’s more advanced economies, such as Malaysia and Thailand. The transitional economies have all sought to attract FDI, partly as a way of ‘importing’ a ready-made private sector, and seeking to stimulate the development of an indigenous private sector, through linkages with foreign investment projects. In this context, it is important to emphasis that the distinction between foreign investment and domestic investment is becoming less apparent. This in turn impacts on investment promotion policy and regulation. Since the 1980s the world has seen the rise of ‘emerging markets’ as a mainstream asset class in which both direct and portfolio investors seek to gain exposure. In the period between 1980 and 1998, no less than 43 countries opened stock markets. Stock markets can play an important conduit role in funnelling capital from wealthy industrialised countries to developing economies, and thereby assist indigenous firms in accessing long-term funding. Further, stock markets support privatisation efforts, and can support FDI activity in various ways (including: M&A deals, gradual market entry, market exit, valuation, deal structuring, and so on). Ideally therefore, all companies (both domestic and foreign) should have potential access to a stock market, particularly given the trend away from relatively closed and vertical MNEs structures that are under-pinned by cross equity holdings, and towards more ‘arm’s length’ structures. As a consequence, MNEs are less willing to play the role of an internal capital market, through leveraging their balance sheet, and the onus is shifting to local firms (affiliates, suppliers, sub-contractors, service providers, etc.) to 39
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 20 and 21: ‘pipeline’ of harmonising legis
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 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
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92 Appendix I - Doing Business in A
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94 Appendix II - ASEAN Investment C
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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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