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

Concerning performance requirements, Thailand does not impose any suchrestrictions. Singapore imposes a minimum scale on ships owned by foreign investors.In Cambodia, foreign investors are required to provide adequate training to Cambodianemployees, and to promote Cambodian staff to senior positions over time. In Lao PDR,local content requirements are imposed in several manufacturing sectors such as leatherproducts and wood products. In Malaysia export targets, technology transfer and localcontent requirements are imposed in the manufacturing sector. In the Philippines exportrequirements are imposed for obtaining incentives, while preferences have to be givento local employees in the electricity sector. In Vietnam foreign firms have to complywith environment protection requirements.Our analysis of FDI policy regimes for ASEAN revealed wide variations in theopenness/restrictiveness of the regimes among them. The movement of investors,screening and appraisal are found to be serious impediments in several countries. As forthe policy on market access, it is worth noting that services sectors such as informationand communication are quite restrictive. Recognizing that service sectors occupy alarge and important part of economic activity in ASEAN countries, provision of greatermarket access to foreign companies can contribute to an improvement of allocative andtechnical efficiency of these countries. A justified fear of market domination bycompetitive foreign companies should be dealt with appropriate competition policy.188