In­tra-Asean in­vest­ments re­main high: re­port

Sun.Star Davao - - BUSINESS -

MANILA -- As­so­ci­a­tion of South­east Asian Na­tions (Asean) com­pa­nies and di­a­logue part­ners Euro­pean Union (EU) and In­dia con­tinue pour­ing in­vest­ments in the re­gion, push­ing in­tra-re­gional in­vest­ment to a record level.

The Asean In­vest­ment Re­port 2017 at­trib­uted the rise in in­trare­gional in­vest­ment to the grow­ing fi­nan­cial strength and sig­nif­i­cant cash hold­ings of Asean firms and their in­creas­ing drive mainly to in­ter­na­tion­al­ize to build com­pet­i­tive­ness and to ac­cess mar­kets.

The re­port said higher in­tra-Asean in­vest­ment last year was driven by a two-thirds in­crease in in­vest­ment in man­u­fac­tur­ing to $8.3 bil­lion, and a dou­bling of in­vest­ment in fi­nance to $5 bil­lion.

It noted many of the For­tune Global 500 com­pa­nies con­tin­ued to in­vest in the re­gion, as they es­tab­lished or added plants or busi­ness func­tions to re­search and de­vel­op­ment (R&D) ac­tiv­i­ties or up­graded their op­er­a­tions.

In­vest­ments by ma­jor global au­to­mo­tive multi­na­tional enterprise (MNE) have also ex­panded with ac­tiv­i­ties in Viet Nam, the Philip­pines and Sin­ga­pore.

“MNEs con­tinue to par­tic­i­pate in in­fra­struc­ture de­vel­op­ment in the re­gion in var­i­ous seg­ments of the value chain,” the re­port added.

The EU is the largest in­vestor group in Asean in value terms, with over 9,000 EU com­pa­nies op­er­at­ing in the re­gion.

Asean is a ma­jor des­ti­na­tion for Out­ward For­eign Di­rect In­vest­ment (OFDI) from In­dia. About 22 per­cent of In­dian global OFDI stock was in Asean in 2015.

“Ma­jor multi­na­tional en­ter­prises (MNEs) from these coun­tries have been present in ASEAN in a wide range of in­dus­tries. Many of them op­er­ate in mul­ti­ple lo­ca­tions across the re­gion in dif­fer­ent seg­ments of the value chain,” it said.

It said for­eign di­rect in­vest­ments (FDI) in­flows from China, Repub­lic of Korea and Aus­tralia also rose last year.

But the re­port added while FDI flows in Asean re­mained at a high level, this was not enough to over­come a de­cline due to di­vest­ment, ac­qui­si­tion of for­eign as­sets by ASEAN com­pa­nies in their home coun­tries and re­pay­ment of in­tra­com­pany loans by af­fil­i­ates within the re­gion.

Mean­while, the Asean In­vest­ment Re­port 2017 was launched Mon­day by the United Na­tions Con­fer­ence on Trade and De­vel­op­ment (UNCTAD) and the Asean Sec­re­tar­iat dur­ing the Asean Busi­ness and In­vest­ment Sum­mit (ABIS) 2017.

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