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."