Investment in Asian tigers down 12%

Investment in Asian tigers down 12%

GENEVA (Reuters): Foreign direct investment (FDI) in five
Asian countries most hit by the region's crisis fell to US$15.4
billion in 1998 from $17.5 billion the year before, a 12 percent
drop, a United Nations agency said on Thursday.

But the UN Conference on Trade and Development (UNCTAD) said
FDI inflows had varied considerably from country to country and
in 1999 were likely to remain within the range of $10-$17 billion
posted by the five "tigers" during the past decade.

The investment climate in Indonesia may need more time to
recover, according to the agency.

FDI in the five countries -- Indonesia, Malaysia, the
Philippines, South Korea and Thailand -- peaked at $17.5 billion
in 1996 and 1997, according to the Geneva-based UNCTAD.

"Newly released data gathered by UNCTAD reveals that, in 1998,
the five Asian countries most affected by the crisis experienced
an overall decline in FDI of some $2 billion, or 12 percent," it
said.

"Inflows into the Republic of Korea and Thailand showed
dramatic increases -- almost doubling; inflows into the
Philippines remained stable; Malaysia showed a decline; while
Indonesia suffered divestment for the first time since 1974."

UNCTAD said that FDI flows to the five countries as a group
were "remarkably resilient" when compared with foreign bank
lending and foreign portfolio equity investment before and during
the financial crisis.

"Barring an unforeseen worsening of the crisis, FDI inflows in
1999 are likely to remain within the range of those during the
1990s ($10 billion to $17 billion), although the performance of
individual countries is likely to differ," it added.

While Indonesia's investment climate may need more to recover,
Malaysia appeared to be well-positioned.

The value of manufacturing FDI projects approved in Malaysia
-- the largest FDI recipient among the five during the 1990s --
posted a 14 percent increase last year, according to UNCTAD.