Foreign direct investment in Southeast Asia: - Regional Office China

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no longer be an appropriate indicator. This in turn underlines the value ofbench-marking across a range of variables.Peter Buckley noted that the challenge for policy-makers is not aboutcapturing larger amounts of FDI activity per se, but rather in optimising thelinkages and positive spillovers that can be derived from foreign investors.And this in turn is primarily about positioning the country, and its domesticcorporate sector, in a way that allows it to plug into the ‘integrated globalfactory’. Part of the solution to this challenge lies in creating the kind ofsupportive enabling environment that is beneficial to both domestic andforeign investors alike – in effect, moving towards fourth generationinvestment promotion. There is a tendency for some countries to favourforeign capital and investment over that of domestic firms, such as throughthe provision of additional incentives for FDI projects, sometimes forinconsistent reasons. This could be quite erroneous because a vibrantdomestic sector is necessary to attract FDI in its global value chain andglobal production network forms.Hafiz Mirza stressed the need to create mechanisms and institutions that canbetter channel and harness the not inconsiderable quantities of capital thatflow into countries, but are not invested in productive assets. For this tohappen, social issues such as corruption also need to be addressed, and thecapacities of local companies need to be built up. Success in this regard willbetter enable domestic firms to insert themselves into the ‘integrated globalfactory’. Axèle Giroud and Adam Cross stressed that a single policy modeldoes not fit all countries facing very different challenges, and that FDIstrategies need to be tailored to meet the specific needs of economies andcorporate sectors with different profiles and at different stages ofdevelopment. The challenge of actually implementing good policies was alsohighlighted, as was the need to pursue some pro-FDI initiatives at theregional level, through regional co-operative endeavour.46
In conclusion, Frank Bartels suggested that key lessons for policy-makersincluded: i) being open to new approaches and innovative ideas; ii) seekingways to differentiate one self from others, in terms of FDI policies; iii)identifying ways to better harness FDI inputs and generate synergies fromthese inputs; iv) adopting a holistic approach to investment promotion, andnot focusing exclusively on MNEs; and v) working to make the enablingenvironment conducive to all investors, through long-term strategies, ratherthan short-term palliatives, such as incentives.Research needsStemming from the EGM, a number of issues were identified where thecurrent body of knowledge is still relatively limited. These issues meritfurther and deeper empirical research and analysis, so as: i) to betterunderstand their characteristics; and ii) thereby assist policy-makers todesign new FDI policies and strategies appropriate for the foreign investmentactivity of today and tomorrow.There is definitely a need to more clearly and accurately depict, and betterunderstand, new dynamic trends within the ‘integrated global factory’concept. Notably with regard to the emergence of looser and less verticallyintegrated international production networks, and what impact this is (orshould be) having on FDI promotion policy. For example, should policymakersshift further away from conventional investment promotion policies,and design new strategies that are better tailored to meet the rise of the‘integrated global factory’? Indeed, to what extent is the conventional role ofIPAs becoming redundant, as the emphasis on FDI promotion shifts to amore holistic approach of improving the business-enabling environment, fordomestic and foreign investors alike?A key missing element in our current body of knowledge are the FDI (andpossibly FPI) aspects of global value (and supply) chains, which serve tointer-connect the nodal points of the ‘integrated global factory’. Untilrecently, global value and supply chains have not been viewed through the47
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 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: ConclusionEmerging Policy Direction
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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