FDI inflows in Asia in 1999

Ulhas Joglekar ulhasj at SPAMbom4.vsnl.net.in
Fri Oct 6 10:42:48 MDT 2000


Thursday
5 October 2000

East, S-E Asia got unexpected boost in 1999 FDI
By Nina Suebsukcharoen
BANGKOK, Thailand: Foreign direct investment to east Asia and southeast Asia
increased by an unexpected 11 percent in 1999, but it actually declined in
three countries most affected by the 1997 economic crisis, the United
Nations said Wednesday.
The increased investment went mainly to newly industrialized economies of
Hong Kong, China, Korea, Singapore and Taiwan, where inflows increased by 70
percent, said a report issued by the UN Conference on Trade and Development
(UNCTAD).
Singapore is "a good example of a country that tried very hard to pull out,
to extract, from those foreign investors the maximum benefit for Singapore,"
said Peter Brimble of Brooker Group, which is an economic consultant to the
Thai government.
The UNCTAD report said east Asia and Southeast Asia received $93 billion in
foreign direct investment, a substantial portion -11.6 percent - of the
global FDI outflows of $800 billion in 1999.
In Korea, the inflows reached an unprecedented $10 billion while investment
values in Singapore and Taiwan saw a significant recovery after a sharp
decline in 1998.
Flows to China, which had been well over $40 billion for four straight
years, dropped by nearly 8 percent to just over $40 billion in 1999, the
report said.
Hong Kong became the second largest recipient in the region, increasing its
investment by more than 50 percent to receive $23 billion, the report said.
It said FDI flows declined in Indonesia, Thailand and the Philippines, three
countries that were the worst hit along with Malaysia and Korea by the 1997
financial crisis.
Cross-border mergers and acquisitions in these five countries reached a
record $15 billion in 1999, the report said.
It said mergers and buyouts have become an important mode of entry for
transnational corporations investing in the region, averaging $20 billion
during the period 1997-1999, compared with an average of $7 billion between
1994 and 1996.
FDI in south Asia declined in 1999 by 13 percent to $3.2 billion. Inflows to
India, the single-largest recipient in the sub-region, were $2.2 billion, a
17 percent decrease over 1998.
Atchaka Brimble, the director of Thailand's Board of Investment, said that
new investments in Thailand are likely to reach the target of 1,000 new
projects worth over 300 billion baht ($7.14 billion) in 2000.
She said the FDI peaked in 1998 at $7.79 billion and totaled $5.9 billion in
1999, of which $2.5 billion went in recapitalization of the banking sector.
(AP)
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