Foreign Direct Investment in ASEAN Economies

Abstract

The ASEAN region has become one of the attractive investment locations in the developing world and attracted a sizeable FDI during 1987-94. There was a spurt in the growth of global FDI flows during 1985-95. The FDI inflows in ASEAN economies have increased from and annual average of $8 billion in 1986-91 to 25.5 billion in 1997. They adopted relatively a free market, free trade, open capital account and liberalized policies to attract FDI. The success of ASEAN countries in attracting FDI may be attributed to a combination of factors that include political, social, economic stability, buoyant economies with capacity, growing domestic markets, facourable factor endowmentsj, particularly natural resources and labour supply. The incentives given by ASEAN countries ranged from tax holidays, accelerated depreciation allowance, export incentives, import duty excempton and concession and low-cost credit facilities to subsidized infrastructure facilities such as industrial estate