Asia the world's top recipient of FDI

KUALA LUMPUR: Amid scratchy global economic growth, Asia accounts for nearly 30% of global foreign direct investment (FDI) inflows, making it the world’s top recipient of FDI.

Generally, developing countries were attracting more FDI than developed economies, according to the United Nations Conference on Trade and Development (Unctad) World Investment Report 2014, which said total inflows to developing Asia (excluding West Asia) amounted to US$382bil last year, 4% higher than the previous year.

In the last two years, top 10 recipients of FDI flows in developing Asia were China, Hong Kong, Singapore, India, Indonesia, Thailand, Malaysia, South Korea, Vietnam and Taiwan.

China took the lead with an estimated FDI outflow of US$101bil last year, spurred by mega-deals such as the US$15bil takeover of Canadian oil and gas company Nexen by China state-owned entity CNOOC Ltd as well as the US$5bil Shuanghui-Smithfield acquisition in the food industry.

South-East Asia registered slower growth, however, with inflows to the region rising just 7% to US$125bil in 2013, compared to the rapid growth in the regional grouping – from US$47bil in 2009 to US$118bil in 2012.

The report said Singapore was the largest FDI recipient in the region, with new mega-deals driving the figure to a record high of US$64bil.

Indonesia showed stable performance, while Thailand’s inflows grew to US$13bil although many projects were shelved due to political instability.

“At today’s level of investment in SDG-related sectors in developing countries – both public and private – we still face, according to Unctad’s estimates, an average annual funding shortfall of some US$2.5 trillion over the next 15 years following the end of the Millennium Development Goals,” UNDP resident representative for Malaysia, Singapore and Brunei Michelle Gyles-McDonnough said at the launch of the report at the Malaysian Investment Develop-ment Authority headquarters.

She highlighted the important linkages between trade and investment, amplifying the need for sustainable development.