South East Asian companies overtake Europeans to become biggest investors in the region
Companies in Indonesia, Malaysia, the Philippines, Singapore and Thailand are receiving more investment from their peers in the ASEAN region, according to a report from the UN Conference on Trade and Development (Unctad).
In 2015, companies from ASEAN nations overtook European companies to become the largest investors in the region, making up 18.5 percent of the overall investment, the report shows. Direct investment from the European Union stood at 16.4 percent, while Japan provided 14.5 percent of the overall investment last year.
Despite the increase in investment between ASEAN nations, however, overall investment in countries in the region has decreased, according to the Unctad report. In 2015 there was $19.9 bn invested in the five countries, down 8 percent[on the previous year.
This is somewhat unsurprising given that four of the five ASEAN countries are less competitive than they were last year, according to the World Economic Forum’s Global Competitiveness Report 2016-2017, which was published on Wednesday.
The report, which assesses the competitive landscape of 138 economies, shows the worst performer in the region is the Philippines, which falls 10 places to 57th, followed by Malaysia, which falls seven places to 25th. Then comes Indonesia, down four to 41st, and Thailand, down two to 34th. Singapore, the only country in the region not to fall, maintains its top position as the second-most competitive world economy.
‘Declining openness in the global economy is harming competitiveness and making it harder for leaders to drive sustainable, inclusive growth,’ says Klaus Schwab, founder and executive chairman of the World Economic Forum.
Elsewhere, India rises sharply in the report for the second year in a row. The country, which has been favorable with investors since the election of Narendra Modi in May 2014, ranks 39th in this year’s report, up from 55th the previous year.
The World Economic Forum concludes from the study that monetary stimulus is not enough to reignite growth if economies are not competitive. It says creating an environment for innovation is essential for innovation to occur, and innovation is connected to openness and economic integration.
