Foreign direct investment in Southeast Asia: - Regional Office China

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‘pipeline’ of harmonising legislation to increase policy coherence was clearly astep in the right direction. The fragmented and small national markets withinthe region called for greater, not less, regionalisation, so that sectors withincountries would be better enabled to diversify within the integrated globalfactory, and thereby seek specialisation within MNEs’ production networks.Regional co-operation at the institutional level is essential to permit industrialcollaboration (and competition) at the micro-economic level. And in thisrespect, the conditions for attracting FDI need to be sustainable for FDI togain traction with increasingly specialised domestic sectors.The high commonality of challenges implied that gains can be made throughco-operation between IPAs across the region, in sharing their responses andpursuing ‘regional best practices’. The national distinctiveness in revealedcomparative advantages and created assets also point to gains from furtherregional division of labour, although it was acknowledged that the danger of‘over competition’ and a ‘race to the bottom’ through incentives wars could,and should, be avoided through regionalism.Second presentation summaryAtchaka Brimble of Thailand’s BOI portrayed the changing characteristics ofthe Thai experience of FDI, highlighting in particular the global and regionalasymmetries in FDI flows, and the FDI performance of the country relative toother recipients in the Asia Pacific area. Thailand is currently enjoyingrenewed interest by investors, with the ‘Triad economies’ as leading sourcesof FDI; and Singapore, Malaysia and Taiwan province of China as thepredominant regional sources of FDI inflows for Thailand.The investment promotion (IP) strategy of Thailand was seen to focus on theleading variables of FDI benchmarking studies, through both short- and longtermplans. Coupled with this re-orientation was greater attention to attracthigher-value added and technologically-intense FDI, in recognition of theneed to shift rapidly away from low- and medium-technology, and towards18
high-technology cluster development. A pressing issue emphasised was thespeed and management of the change, which was governed by institutionaldevelopment and constraints therein. A recognition of the role of theknowledge-based economy was factored into upgrading skills and investing ininnovation as an essential component of investment promotion.The presentation described a spatial initiative, whereby the clustering andvalue-chain components of investment promotion could be fully developed,principally by targeting specific investors in auto, agri-business, informationcommunications technology (ICT), fashion, biomass, and providing servicesoutsourcing.Commentary and discussionFrank Bartels noted the widening of the FDI ownership base, which pointedto increasing competitiveness across domestic sectors. This presaged futureintensification of backward and forward linkages, albeit only if advancing upthe value-chain can be matched by policy craft dedicated to upgrading theskills sought by investors. Also crucially important is the need to create‘locational assets’ that will enable exports to diversify, in terms of bothproduct category and destination, away from electronics and the Triadcountries respectively, so as to increase specialisation. It was noted that theevolution of Thailand’s experience in FDI placed increasing demands onpolicy analysis and research with respect to the ‘drivers’ of industrialdevelopment.The customisation of incentives for government prioritised strategic clusterdevelopment was noted as vitally necessary, not only for inward FDI, butalso outward FDI. This customisation, at least in some countries of theregion, is being performed at the provincial level. This raises the thornyissue of the efficacy of investment incentives, and the potential for competingfor FDI purely through incentive packages. While available ‘best practice’provides guides to IPA organisation and management, the key provision ofadapting best practices to meet specific national (and local) conditions is a19
Page 3: Foreign Direct Investment in Southe
Page 7 and 8: PrefaceThis UNIDO report presents t
Page 9 and 10: PreambleWithin the constantly evolv
Page 11 and 12: IntroductionThe Changing Face of Fo
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: consequence, as well as in terms of
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
Page 67 and 68: only of UNIDO but also other UN spe
Page 69 and 70: LIST OF ABBREVIATIONSAFTA - ASEAN F
Page 71 and 72:
in mind that host policy for attrac
Page 73 and 74:
forces of competition and co-operat
Page 75 and 76:
2. BACKGROUND ISSUESAn accurate per
Page 77 and 78:
economies. In contrast, Sub-Saharan
Page 79 and 80:
costs, boost quality and accelerate
Page 81 and 82:
Fourthly, in terms of a framework f
Page 83 and 84:
in joint venturing), while retainin
Page 85 and 86:
experiencing the kind of global rel
Page 87 and 88:
other hand, being predominantly nat
Page 89 and 90:
Also, the trade surplus (or deficit
Page 91 and 92:
limited [Freeman and Bartels (2000)
Page 93 and 94:
technology and innovation policy; h
Page 95 and 96:
Credit Information Index NA 0 3 0 6
Page 97 and 98:
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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