Five-Fold Rise In Fdi Flow To Asia-Pacific Region

The annual average inflow of foreign direct investments (FDI) to Asia and the Pacific region have quintupled in the last decade. The region's share in world annual average flows doubled from 9 per cent to 18 per cent, while its share of FDIs to developing countries remained more or less stable, at 55 per cent, according to the United Nations Council on Trade and Development, World Investment Directory.

In 1998, FDI inflows registered its first decline in the region after thirteen years. Preliminary estimates suggest that in 1999, FDI flows held steady with a one per cent increase, according to the report.

 

FDI in South Asia grew over the decade by a multiple of 15, although from a very low average in the late 1980's. The growth is due to India's opening up to FDIs.

Average flows to India were negligible at the end of the 1980's and stood at $ 2.7 billion in the late 1990's says the report. This was, however, behind China's $ 41 million inflow between 1995-98.

The secondary sector continues to attract significant amounts of FDI flows to the region. The tertiary sector is growing in importance, with business support services such as trade, transport, storage and communications and finance developing faster than any others. In 1997, for instance, trade accounted for up to 20 per cent of FDI stock in Thailand, while, finance represented as much as 30 per cent in Pakistan, the report states.