UNCTAD’s World Investment Report 2023 reveals that foreign direct investment (FDI) inflows to developing Asia remained stable at $662 billion in 2022, with significant variations among countries in the region. Let’s explore the key highlights from the report:
The concentration of FDI Flows:
The majority of FDI inflows in developing Asia were concentrated in five economies: India, China, Singapore, Hong Kong, and the United Arab Emirates. These countries accounted for almost 80% of the total FDI received.
India’s FDI Performance:
India’s FDI inflows increased by 10% to reach $49.3 billion. The country emerged as the third-largest host for greenfield project announcements in South Asia and witnessed significant investments in the renewable energy sector.
Bangladesh’s Growing Investments:
Bangladesh experienced a notable 20% growth in overseas investments, reaching $3.5 billion.
Regional Highlights:
Singapore emerged as the top recipient of FDI in Southeast Asia, attracting a record high of $141 billion, while Malaysia recorded a remarkable 39% growth in FDI inflows, totaling $17 billion. Vietnam and Indonesia also observed FDI growth of 14% and 4% respectively, with inflows reaching $18 billion and $22 billion.
Decline and Growth:
FDI to the Philippines declined by 23%, primarily due to divestments in various sectors. Conversely, China witnessed a 5% increase in FDI, amounting to $189 billion, driven by investments in manufacturing and high-tech industries. Hong Kong experienced a 16% decline in FDI, reaching $118 billion. The United Arab Emirates attracted a 10% increase in foreign investments, reaching a record high of $23 billion, whereas Saudi Arabia saw a significant decrease of 59% in FDI, amounting to $7.9 billion.
FDI Growth in Regional Economic Blocs:
FDI has been on the rise in major regional economic blocs within developing Asia. ASEAN member states witnessed an impressive 41% increase in FDI, totaling $222 billion. The countries participating in the Regional Comprehensive Economic Partnership (RCEP) experienced a substantial 42% increase, reaching $580 billion. FDI in Gulf Cooperation Council (GCC) states surpassed 100%, amounting to $37 billion. SAARC nations observed a 20% growth in FDI, reaching $56 billion.
The UNCTAD’s World Investment Report 2023 provides valuable insights into FDI trends in developing Asia, emphasizing the concentration of FDI flows, the performance of specific countries, and the growth in regional economic blocs.
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