Foreign investment in ASEAN undeterred by war on terror

Foreign investment in ASEAN undeterred by war on terror

Agence France-Presse, Bandar Seri Begawan

Foreign direct investment (FDI) into Southeast Asia rose 13.4 percent in 2001 in a sign that alleged terrorist links in the region had little impact on investment flows, economic ministers said Wednesday.

FDI in 2001 totaled US$13.06 billion, up from 11.52 billion dollars in the previous year.

"The council welcomed this positive development and noted that the 11th September terrorist attacks have limited impact on foreign and ASEAN firms' investment plan and commitment to the region," the ministers said in a statement.

The ministers also announced new initiatives to shore up investor confidence in the region, where pockets of Muslim militants linked to Osama bin Laden's al-Qaeda network are located.

In a statement issued after a meeting of the ASEAN Investment Area Council here, the ministers said FDI from the United States was up 30 percent and investment from the European Union jumped 57 percent.

Investments from Japan picked up to $896 million last year, said the ministers.

The investment council, which monitors progress under the ASEAN Investment Area, aimed at luring more investors into the region, met ahead of their 34th annual meeting here on Thursday.

Brunei Minister for Industry and Primary Resources Abdul Rahman Taib also noted that the increase in investments was achieved despite the U.S.-led global economic slowdown.

"Given the improved regional business environment and the expected stronger regional economic growth in 2002, the council is confident that the outlook for FDI flows to ASEAN will continue with the upward trend," the statement said.

"All these initiatives indicate ASEAN's seriousness to stay in competition," ASEAN spokesman M.C. Abad told AFP.

But he said the FDI figures were still small when compared to before the Asian financial crisis in 1997-1998 when investment into Indonesia alone stood at $33 billion.

ASEAN, a market of 500 million consumers, has faced growing competition from giant neighbor China, which has been raking in the lion's share of FDI into Asia at the expense of ASEAN.

"Global competition for FDI will continue to become more and more intense," Taib said.

He said ASEAN needed "to work to get our acts together so that we do not lose the momentum to attract foreign direct investment into ASEAN."