Asia and the Pacific have emerged as one of the most dynamic regions for foreign direct investment (FDI) over the past decade, despite a slowdown in 1998. According to the latest volume in UNCTAD’s series of Investment Directories, between the late 1980s and the late 1990s, annual average FDI flows to the region quintupled, going from just under US$16 billion to slightly more than US$80 billion (table 1 and figure 1). The region’s share in world annual average flows doubled, from 9% to 18% (figure 2), while its share of flows to developing countries remained more or less stable, at 55%.
In 1998, in the wake of the financial crisis, FDI inflows into the region registered their first decline in 13 years, but preliminary estimates suggest that in 1999, FDI flows held steady, with a 1% increase.
Some of the other highlights of the decade are:
- In the late 1980s, the largest country in the region (China) had average flows three quarters the amountof those attracted by one of the smallest (Singapore). By the late 1990s, China’s averageflows had grown by a multiple of 13, reaching US$41 billion, while Singapore’s more than doubled, toUS$ 8 billion.
- FDI in South Asia grew over the decade by a multiple of 15, albeit from a very low average in the late1980s. The growth is mainly a function of the gradual opening to FDI of the largest country in the subregion, India. Average flows to India were negligible at the end of the 1980s and stood at US$2.7 billion in the late 1990s.
- South-East Asian countries other than the four newly industrializing economies (NIEs) caught up over theperiod with the NIEs, attaining average flows exceeding US$ 16 billion. In the late 1980s, thataverage had been just over US $4 billion, as compared to some US$ 8 billion for the NIEs.
- The secondary sector continues to attract very significant amounts of FDI flows to the region. Thetertiary sector is growing in importance, however, with business-support services such as trade, transport, storage and communications, and finance developing faster than any others. In 1997, for instance, trade accounted for up to 20% of FDI stock in Thailand, whilst finance represented as much as 30% in Pakistan .
- FDI continues to flow very unevenly into individual countries in Asia and the Pacific. More than 80%of the region’s inflows in the late 1990s went to just six economies: China, Hong Kong (China), Indonesia, Malaysia, Singapore and Thailand. As for the sources of these flows, developed countries continue to dominate flows to the NIEs, while the NIEs themselves dominate the flows to many other countries including, pre-eminently, China.
The World Investment Directory 2000: Asia and the Pacific is the seventh volume in a series thatcovers the six main regions of the world.(1) The present volume is the second to deal with Asia and the Pacific, which was covered by the first volume in the series, in 1992. The UNCTAD Investment Directories, intended to be a research tool for academics, investors and policy makers, complement the annual World Investment Reports, which focus on the most recent developments in FDI and examine topical issues. The data collected and organized by these directories on FDI (and the transnational corporations that generate it) offer the reader the opportunity to acquire an in-depth understanding of the roles and patterns of FDI as well as FDI trends. The volume begins with an examination of the most important FDI trends in the region, followed by a review of developments in multilateral and bilateral investment agreements, a technical note highlighting the methodological issues related to FDI statistics, and country profiles.
Subject to the availability of data, the country profiles offer:
- a short description of each economy’s FDI situation, investment policy, definition of FDI, and sources and availability of FDI statistics;
- time-series data on inward and outward FDI flows and stocks;
- data on the industrial and geographical breakdown of inward and outward FDI flows and stocks;
- the ownership structure of home-based TNCs and foreign affiliates;
- data on the importance of the activities of home-based TNCs and foreign affiliates, including assets, employment, sales, value added, profits, exports, imports, research and development expenditures, and royalty receipts and payments;
- a list of the largest home-based TNCs and the largest foreign affiliates in the economy; and
- bibliographical information.
