FDI in ASEAN rising, still dropping in RI

The Jakarta Post, Jakarta

While investment flows into Indonesia remains negative, flows to other ASEAN countries are showing signs of rising, with realized foreign direct investment (FDI) in the region at US$1.95 billion during the first half of 2002.

According to a report issued by the secretariat office of the Association of South East Asian Nations, the above figure was slightly higher than $1.94 billion posted in the same period in 2001. The figure excludes Singapore and Myanmar, which do not provide half-year data.

"It shows (the region's) resilience in the light of the global FDI slowdown," the report said. It also added that Philippines, Malaysia and Vietnam topped the list of countries in the region that lured FDI the most during the first semester of the year.

The three countries drew $1.3 billion, $730 million and $450 million respectively.

In a stark contrast, Indonesia continued to see massive disinvestment during the period, extending the downward trend that began in 1997.

Some $1.1 billion of approved investments were withdrawn as of June, as compared to $3.3 billion worth of withdrawals posted for all of 2001.

Noordin Azhari, ASEAN Secretariat's director of economic corporation said that in order to counter the declining trend of global FDI stock, ASEAN members must develop a resilient domestic economy that can withstand external factors.

"We have to proceed with our regional economic integration through AFTA, by reducing tariff and non-tariff barriers and enhancing trade facilitation by harmonizing standards and customs procedures to generate intra-ASEAN trade and investments.

"All these will spur economic growth and help attract FDI inflows...," Noordin said.

AFTA is the regional free trade area.

FDI in ASEAN

(in US$ million)

------------------------------------------------------------- Country 1997 1998 1999 2000 2001 2002* -------------------------------------------------------------- Brunei 701 573 747 549 526 216 Cambodia 168 120 143 111 112 17 Indonesia 4,678 (365) (2,745) (4,549)(3,278) (1,172) Laos 86 45 51 34 24 22 Malaysia 6,323 2,714 3,895 3,787 554 731 Myanmar 878 683 304 208 192 NA Philippines 1,261 1,718 1,734 1,354 1,537 1,342 Singapore 12,836 8,214 12,825 5,389 8,583 NA Thailand 3,626 7,433 6,149 3,280 3,780 334 Vietnam 2,587 1,700 1,483 1,289 1,300 450 -------------------------------------------------------------

Total ($ billion) 33.1 22.8 24.5 11.4 13.3 1.95 ------------------------------------------------------------- * As of June () stands for disinvestment Source: ASEAN Secretariat