Foreign direct investment (FDI) is a major driver of economic growth in many countries in the Association of Southeast Asian Nations (ASEAN). ASEAN’s six largest economies – Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam – have become increasingly attractive to international investors, partly as a result of rising production and wages in China and India. At the same time, some ASEAN countries have tackled corruption and inflation, taken steps to invest in infrastructure, and liberalized their economies to attract more foreign capital. We explore FDI trends in ASEAN by the numbers.
The amount of FDI Singapore received in 2012. Singapore received more FDI than Indonesia, Malaysia, the Philippines, Thailand, and Vietnam combined. Indonesia and Malaysia were the 2nd and 3rd largest recipients of FDI in ASEAN in 2012, respectively. Singapore also ranked as the most attractive country for foreign investors in the Asia-Pacific region, according to the 2013 Asia Pacific Investment Climate Index released by Singapore-based consulting firm Vriens & Partners.
The amount of foreign investment Laos received in 2012, the lowest among ASEAN countries, despite the country’s 7-8 percent annual growth rate in recent years. Political corruption and weak rule of law continue to deter foreign capital from entering the country.
4th, 8th, and 11th
The rankings of Indonesia, Thailand, and Vietnam, respectively, on the list of the world’s top 20 prospective host countries for FDI in the next two years, according to the 2013 World Investment Report released by the United Nations Conference on Trade and Development. Indonesia was ranked as the 17th host economy in 2012.
The percentage by which FDI in the Philippines grew from 2011 to 2012. While FDI jumped from $981 million in 2011 to $2.8 billion in 2012, the Philippines still attracts the smallest amount of FDI among the five largest ASEAN economies. President Benigno Aquino III’s emphasis on good governance and maintaining political stability is expected to help attract more foreign businesses to the country in coming years.
Brunei’s ranking in terms of attractiveness to FDI among Asia-Pacific countries, according to the 2013 Asia Pacific Investment Climate Index. Brunei’s stable political climate has, among other factors, enabled it to sustain stable and consistent macroeconomic policies.
The percentage of firms in non-restricted sectors foreigners are allowed to own in Myanmar; the remaining companies must be Myanmar-owned. The country’s rapid transition to democracy has resulted in rising business interest in the Myanmar market and improvements in the investment climate. Myanmar has the potential to become a favorite destination for FDI if it continues to implement political and economic reforms.