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

infrastructure such as electric power, paved roads and transportation, and ports,insufficient investment incentives for the development of supporting industries, andimmaturity of financial markets.Categories other than v), vi), and ix) are arranged in descending order in terms ofthe percentage of the total number of incidents: category i) restrictions on foreignentry (10 percent), category viii) labor regulations and related practices excessivelyfavorable to workers (7 percent), category iii) restrictions on overseas remittances andcontrols on foreign currency transactions (5 percent), category ii) performancerequirements (3 percent) category iv) restrictions on the movement of people andemployment requirement (3 percent), category vii) insufficient protection of IPRs (2percent) and category x) restricted competition and price controls (2 percent).Although relatively low percentages for the categories for FDI liberalization implythat issues involving direct barriers to FDI (problems preventing FDI liberalization)are not so serious as those involving indirect barriers to FDI (problems preventing FDIfacilitation) in the region, they are critical impediments in some low-income countries.Major problems for category i) include prohibition of or restrictions on foreignentry (for specific sectors), restrictions on foreign ownership ratios, joint venturerequirements (with specified business partners), and restrictions on foreign ownershipof land. The problems for category viii) include difficulty in firing workers, wagerelatedissues such as rapidly rising wage levels, dramatic increases in minimum wagelevels, and no allowance for lowering wage levels, and labor regulations and relatedpractices that are excessively favorable to workers. The problems for category iv)202