Implementing agency: ASEAN Secretariat
Time: September 2016
Foreword:
"ASEAN remains a major destination of global foreign direct investment (FDI), receiving around 16 per cent of the world FDI among developing economies with total FDI flows of $120 billion in 2015. Regional investment expansion by Multinational Enterprises (MNEs) was strong in 2015 and foreign MNEs continued to strengthen their footprint in the region in manufacturing, finance, infrastructure and other services. ASEAN companies also continued to export and made new investments in the region, pushing up both intra-regional investment and the region’s share of FDI in ASEAN. All these positive indicators seem to defy the 8% decline in total FDI flow and the gloomy and rather uncertain global economic outlook. How do we make sense of these developments in the investment landscape of the ASEAN region? What was the impact of the ASEAN Economic Community on the investment environment in ASEAN?
The ASEAN Investment Report 2016 will provide some answers to these questions, and more. With the theme “Foreign Direct Investment and MSME Linkages”, this latest edition examines the drivers and motivations that underpin investments in ASEAN. It takes a closer look at MNE activities and operations in the ASEAN region. Specifically, it examines the case of two important sources of FDI to ASEAN, that of Korea and the United States, with useful insights on the approaches taken, and the success and challenges faced.
An additional feature of this year’s report is the study and analysis on the investment activities of micro, small and medium enterprises (MSME) in ASEAN – namely on their linkages and internationalization strategies – why and how they do so. ASEAN MSMEs account for the lion’s share of business establishments and contribute significantly to employment and GDP in the region. They play an important role as suppliers or contractors to MNEs by helping large firms source locally or by operating close to their MNE clients in overseas markets.
An increasing number of ASEAN MSMEs are “born global” firms, taking advantage of digital platforms and business models to rapidly grow regionally and internationally. ASEAN MSMEs that have invested in the region include Java Offshore (Indonesia), CMC (Malaysia), KLT Fruits (Philippines), Vela Diagnostics (Singapore), QUO Global (Thailand), and Phibious (Viet Nam). These and many more are featured in this report, providing useful lessons learned for entrepreneurs in ASEAN, as well as for policy makers keen to increase the competitiveness of MSMEs, increase their level of participation and contribution towards the goals of the ASEAN Economic Community and in improving the overall investment environment."
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