Chapter 4 Investment Climate Study of ASEAN Member ... - ERIA

CHAPTER 4Investment Climate Study of ASEAN Member CountriesSHUJIRO URATAEconomic Research Institute for ASEAN and East Asia,Graduate School of Asia-Pacific Studies, Waseda UniversityMITSUYO ANDOFaculty of Business and CommerceKeio UniversityThis paper analyzes the FDI environment of the ASEAN countries with a view that theidentification of impediments to FDI would provide useful information to policy makersinterested in attracting FDI. The coverage of impediments to FDI in this study includes notonly the FDI policies but also the implementation and enforcement of these policies. As for theopenness of FDI policies, we find wide variations among the ASEAN countries. Most seriousimpediments are found to be the lack of transparency and complicated/delayed processing inscreening and appraisal procedures regarding FDI application. Our findings indicate the needfor further liberalization of FDI policies and promotion of facilitation measures in order tosuccessfully attract FDI. In order to achieve these goals, we make several suggestions. First, topromote FDI policy liberalization, the ASEAN countries should use various existing frameworks,such as WTO/GATT’s TRIMs agreement, BITs, and FTAs. In particular, ASEAN should use theASEAN Comprehensive Investment Agreement. Second, to overcome obstacles concerning FDIfacilitation, the ASEAN countries should actively use various cooperation programs withdeveloped countries to improve human resources engaged in the implementation andenforcement of FDI policies. Possible multilateral and regional sources of technical assistancein this area are the UNCTAD, OECD, and ERIA. Third, monitoring of the implementation ofFDI liberalization and facilitation measures has to be emphasized to achieve a freer FDIenvironment. In this regard, a monitoring mechanism should be established in ASEAN or inERIA.162