Foreign investment key for APEC's developing nations
Foreign investment key for APEC's developing nations
BANGKOK (AFP): APEC government officials and business leaders met here yesterday to grapple with the issue of foreign investment and its role in fueling the developing economies of the region.
In his opening remarks to the APEC Investment Symposium, co- chairman Susumu Yamagake, a political science professor from Tokyo University, said investment had overtaken trade in importance for economic relations between countries.
"Nowadays foreign investment is the source of interdependence between countries," he told more than 100 government officials and business leaders from member countries of the Asia Pacific Economic Cooperation forum.
This interdependence, however, required a "consistent and stable" environment for foreign investors, leading Hong Kong businessman Richard Li told the conference in a closed-door session.
Many governments restricted foreign investment in high-profile sectors such as power and telecommunications, although countries such as Indonesia were beginning to liberalize, Li was quoted as saying by a participant.
Foreigners were only acceptable if the "benefits overwhelmingly outweigh the political and economic costs," said Li, who heads the Pacific Century Group and founded the Hong Kong-based Star TV satellite television network in 1990.
Advocates for the liberalization of such laws argue that attracting and keeping foreign investors is imperative for developing economies, not only for financial reasons, but also for bringing in much needed technology and skills.
"Foreign direct investment is very important for economic growth," Baang Young-Min, director of South Korea's foreign investment division, told AFP.
"Koreans realize that we have to dismantle economic frontiers," he said. "As far as the economy is concerned, we are in the process of moving towards one single, unified market."
Free access
But while both the private sector and governments can agree, in principle, on the virtues of free access for foreign investment, in practice both sides are worlds apart.
"There are still many countries with many restrictions," Hiroshi Kadota, director of the Asian Affairs department of the Japan Federation of Economic Organizations, or Keidanren, told AFP.
Kadota said restrictions in Japan's closest markets, China and South Korea, were keeping Japanese companies at bay. He added that the situation could get worse if China decided to reduce incentives for foreign firms.
Participants at the two-day symposium pointed out that the 18 APEC member economies would do well to bring about a general liberalization of foreign investment laws, as many were now becoming outward investors.
APEC does not have a formal investment code for its members, but adopted a set of non-binding investment principles -- considered "aspirational and voluntary" -- at a ministerial meeting in Jakarta in 1994.
APEC groups Australia, Brunei, Canada, China, Chile, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, South Korea, Taiwan, Thailand and the United States.
The symposium, also attended by officials from unaffiliated international organizations, was aimed at bringing together government and business, but some from the private sector suggested that their voices would not be heard.
"Most of the delegates here are government officials," one business representative said. "Investment issues are very divisive, it will be very difficult to make clear our opinion on these matters."