Foreign direct investment in Southeast Asia: - Regional Office China
Foreign direct investment in Southeast Asia: - Regional Office China
Foreign direct investment in Southeast Asia: - Regional Office China
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high-technology cluster development. A press<strong>in</strong>g issue emphasised was thespeed and management of the change, which was governed by <strong>in</strong>stitutionaldevelopment and constra<strong>in</strong>ts there<strong>in</strong>. A recognition of the role of theknowledge-based economy was factored <strong>in</strong>to upgrad<strong>in</strong>g skills and <strong>in</strong>vest<strong>in</strong>g <strong>in</strong><strong>in</strong>novation as an essential component of <strong><strong>in</strong>vestment</strong> promotion.The presentation described a spatial <strong>in</strong>itiative, whereby the cluster<strong>in</strong>g andvalue-cha<strong>in</strong> components of <strong><strong>in</strong>vestment</strong> promotion could be fully developed,pr<strong>in</strong>cipally by target<strong>in</strong>g specific <strong>in</strong>vestors <strong>in</strong> auto, agri-bus<strong>in</strong>ess, <strong>in</strong>formationcommunications technology (ICT), fashion, biomass, and provid<strong>in</strong>g servicesoutsourc<strong>in</strong>g.Commentary and discussionFrank Bartels noted the widen<strong>in</strong>g of the FDI ownership base, which po<strong>in</strong>tedto <strong>in</strong>creas<strong>in</strong>g competitiveness across domestic sectors. This presaged future<strong>in</strong>tensification of backward and forward l<strong>in</strong>kages, albeit only if advanc<strong>in</strong>g upthe value-cha<strong>in</strong> can be matched by policy craft dedicated to upgrad<strong>in</strong>g theskills sought by <strong>in</strong>vestors. Also crucially important is the need to create‘locational assets’ that will enable exports to diversify, <strong>in</strong> terms of bothproduct category and dest<strong>in</strong>ation, away from electronics and the Triadcountries respectively, so as to <strong>in</strong>crease specialisation. It was noted that theevolution of Thailand’s experience <strong>in</strong> FDI placed <strong>in</strong>creas<strong>in</strong>g demands onpolicy analysis and research with respect to the ‘drivers’ of <strong>in</strong>dustrialdevelopment.The customisation of <strong>in</strong>centives for government prioritised strategic clusterdevelopment was noted as vitally necessary, not only for <strong>in</strong>ward FDI, butalso outward FDI. This customisation, at least <strong>in</strong> some countries of theregion, is be<strong>in</strong>g performed at the prov<strong>in</strong>cial level. This raises the thornyissue of the efficacy of <strong><strong>in</strong>vestment</strong> <strong>in</strong>centives, and the potential for compet<strong>in</strong>gfor FDI purely through <strong>in</strong>centive packages. While available ‘best practice’provides guides to IPA organisation and management, the key provision ofadapt<strong>in</strong>g best practices to meet specific national (and local) conditions is a19