Foreign direct investment in Southeast Asia: - Regional Office China

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The realignment of structural factors in the roles of MNEs, international smalland medium sized enterprises (ISMEs) in global manufacturing and servicespresent considerable policy challenges to policy-makers in developingcountries. The EGM and this report are intended to deliver assistance inidentifying suitable responses and solutions to these challenges.8
IntroductionThe Changing Face of Foreign Direct InvestmentThe important role played by foreign direct investment (FDI) in economicgrowth and development is widely accepted. UNIDO’s own analyses ofindustrial organisation, and the determinants of competitive industrialperformance, identify FDI as a key driver of a country’s capacity to trade.Not surprisingly, therefore, developing countries’ industrial plans commonlyseek to attract FDI inflows, and the countries of Southeast Asia have provento be leading exponents in this regard. On average, South and East Asiaattracted 7% of annual global FDI flows in the 1980s and just under 15% inthe 1990s. This contrasts markedly with Sub-Saharan Africa, which attractedjust 1.2% and 0.8% in the same periods, respectively. While the total globalflows of FDI tend to vary each year, up and down, one constant is theasymmetry of FDI distribution, with some regions and countries faring muchbetter than others in attracting and hosting foreign investment projects (seeAppendix V).Another feature of FDI activity is its steadily increasing complexity, thanks inpart to technological and communication advances, and the reduction invarious regulatory and other barriers to cross-country investment and trade[UNIDO (2005)]. Market liberalisation is one driver of FDI flows, as isfinancial liberalisation, permitting capital to flow more easily across theglobe. This is evidenced by advances in sourcing and outsourcing, and theglobal integration of production, marketing and servicing networks as interconnectedsystems that can be distributed right around the world. All thesedifferent activities are pinned together by MNEs through their strategic -- andincreasingly dynamic and fluid -- relationships with affiliates, subsidiaries andsuppliers. Indeed, over time, we are seeing the production and otherbusiness activities of MNEs being increasingly finely ‘sliced and diced’ intosmaller and smaller constituent elements, and then reconfigured, so as togain competitive advantage from economies of scale and economies of scope[Bartels and Pass (2000)].9
Page 3: Foreign Direct Investment in Southe
Page 7 and 8: PrefaceThis UNIDO report presents t
Page 9: PreambleWithin the constantly evolv
Page 13 and 14: Theme 1FDI and Multinational Enterp
Page 15 and 16: These include: i) changes in long-t
Page 17 and 18: quality of life in a country can be
Page 19 and 20: consequence, as well as in terms of
Page 21 and 22: high-technology cluster development
Page 23 and 24: Theme 3FDI, Boundaries, Hierarchies
Page 25 and 26: A second dimension is that incentiv
Page 27 and 28: industrial sector and sub-sector le
Page 29 and 30: industrial base without relying to
Page 31 and 32: socialising public goods and privat
Page 33 and 34: Typically, but not exclusively, Sin
Page 35 and 36: generate tax revenues to fund vario
Page 37 and 38: cumulatively serving to constrain F
Page 39 and 40: Southeast Asia as an integrated mar
Page 41 and 42: Theme 5FDI and Capital in Southeast
Page 43 and 44: Finally, there is also a need for i
Page 45 and 46: components of the integrated global
Page 47 and 48: ConclusionEmerging Policy Direction
Page 49 and 50: In conclusion, Frank Bartels sugges
Page 51 and 52: Taking the above research needs int
Page 53 and 54: Annex 1:Presenters at the EGMName P
Page 55 and 56: TIMOR LESTEMs. Warubon SUKASAMEMr.
Page 57 and 58: 14:00 - 15:30 Theme II: Intra-regio
Page 59 and 60: y Japan ITPOsCommentator: Frank L.
Page 61 and 62:
This type of deep information excha
Page 63 and 64:
The extent of FDI effects and their
Page 65 and 66:
Appendix IV: Opening Statement by U
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only of UNIDO but also other UN spe
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LIST OF ABBREVIATIONSAFTA - ASEAN F
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in mind that host policy for attrac
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forces of competition and co-operat
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2. BACKGROUND ISSUESAn accurate per
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economies. In contrast, Sub-Saharan
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costs, boost quality and accelerate
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Fourthly, in terms of a framework f
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in joint venturing), while retainin
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experiencing the kind of global rel
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other hand, being predominantly nat
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Also, the trade surplus (or deficit
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limited [Freeman and Bartels (2000)
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technology and innovation policy; h
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Credit Information Index NA 0 3 0 6
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Appendix II - Investment climate in
Page 99 and 100:
REFERENCESAlmor T., Hirsch S., 1995
Page 101 and 102:
Freeman N. J., Bartels F. L., Eds.,
Page 103:
Trigeorgis L., 1996, Real Option: M
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Foreign direct investment in Southeast Asia: - Regional Office China

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