MULTILATERAL INVESTMENT GUARANTEE AGENCYMULTILATERAL INVESTMENT GUARANTEE AGENCYA Member of the World Bank Group

Investment Patterns in ASEAN

MIGA FDI Study Findings and Lessons Learned

Presented by

Bill Luttrell - MIGA

MULTILATERAL INVESTMENT GUARANTEE AGENCYMULTILATERAL INVESTMENT GUARANTEE AGENCYA Member of the World Bank Group

00

200200

400400

600600

800800

10001000

120012001995

1995

1996

1996

1997

1997

1998

1998

1999

1999

2000

2000

ForeignDirectInvestment

ForeignDirectInvestment

14001400

2001

2001

Total Global FDITotal Global FDI

Total M&ATotal M&A

Total Developing Countries Total Developing Countries

Total Asia (less Aus,NZ,Japan)Total Asia (less Aus,NZ,Japan)

Total ASEANTotal ASEAN

2001 World Investment Report - UNCTAD

MULTILATERAL INVESTMENT GUARANTEE AGENCYMULTILATERAL INVESTMENT GUARANTEE AGENCYA Member of the World Bank Group

MIGA – Deloitte & Touche FDI Survey

• Key business objectives behind FDI decision

• Most attractive destinations for FDI

• Key factors and considerations that influence strategy

MULTILATERAL INVESTMENT GUARANTEE AGENCYMULTILATERAL INVESTMENT GUARANTEE AGENCYA Member of the World Bank Group

Most Important Objectives When Investing Outside of Home Country

Develop new

technologies 2%

Consolidate operations

4%

Improved productivity

2%

4%

Source Raw Materials

6%

Reduce risk 1%

Improved labor force

access

1%

8% Reduce operating cost

17%

Improved market access

55%

Develop new product

lines

Other factors

MULTILATERAL INVESTMENT GUARANTEE AGENCYMULTILATERAL INVESTMENT GUARANTEE AGENCYA Member of the World Bank Group

35%

33%32%

27%27%

26%24%

23%23%

22%21%21%

20%19%19%

66%

0% 10% 20% 30% 40% 50% 60% 70%

35%

19 %

19 %

40%

39 %39 %United Kingdom

Germany

Czech Republic

Brazil

China

Russia

United States

Mexico

Canada

France

Australia

Spain

Poland Italy

Singapore

Chile

Thailand India

Japan

HungaryMalaysia

Argentina

Top FDI Destinations

MULTILATERAL INVESTMENT GUARANTEE AGENCYMULTILATERAL INVESTMENT GUARANTEE AGENCYA Member of the World Bank Group

Most Influential Site Selection Factors

• Access to customers (77%)

• Stable social and political environment (64%)

• Ease of doing business (54%)

MULTILATERAL INVESTMENT GUARANTEE AGENCYMULTILATERAL INVESTMENT GUARANTEE AGENCYA Member of the World Bank Group

Investment Plans

• Postpone Project (47%)

• Downsize Project (30%)

• Go ahead with Project (20%)

• Cancel Project (6%)

MULTILATERAL INVESTMENT GUARANTEE AGENCYMULTILATERAL INVESTMENT GUARANTEE AGENCYA Member of the World Bank Group

Lessons Learned … 10 suggestions for Sustainable Investment

1. Improve domestic demand2. Strengthen AFTA / AIA / ASEAN-China Free Trade

Area3. Remove protectionist barriers4. Provide better and standardized investment

information5. Pro-active marketing6. Improve political and social environment7. Improve transparency and reduce corruption8. Improve education to match investor’s skill needs9. Improve infrastructure and development of industrial

clusters10.Leverage domestic businesses through linkages to

FDI

MULTILATERAL INVESTMENT GUARANTEE AGENCYMULTILATERAL INVESTMENT GUARANTEE AGENCYA Member of the World Bank Group

Q & A

MIGA / D&T FDI Survey:www.ipanet.net\fdisurvey