ASEAN Investment Report 2018

Foreign Direct Investment and the Digital Economy in ASEAN

The ASEAN Investment Report is an annual report analysing investment and related issues in the region. It is prepared under a technical cooperation arrangement between the ASEAN Secretariat and UNCTAD.

FDI flows to ASEAN rose to a record level, from $123 billion in 2016 to $137 billion in 2017, underpinned by significant rise in investment in eight Member States. As a result, ASEAN’s share of FDI flows to developing economies rose from 18 per cent in 2016 to 20 per cent in 2017. Of the total FDI flows to East and South-East Asia, ASEAN’s share also increased from 31 per cent in 2016 to 34 per cent in 2017. Intra-ASEAN investments, the biggest contributor to FDI flows in the region, reached a new high of $27 billion, or around 19 per cent to total inflows in the region.

An important development in ASEAN is the rising investment in the digital economy, which includes e-commerce, fintech, venture capital and other digital activities such as in the development of data centres and various information and communication technology (ICT) infrastructure. Foreign and ASEAN digital MNEs and ICT companies are now increasing their attention on the region. Greenfield non-manufacturing ICT investment projects have grown rapidly from $2.8 billion in 2010 to $3.9 billion in 2017, while cross-border ICT mergers and acquisitions rose from just $172 million in 2010 to $3.6 billion in 2017.

At the regional level, ASEAN Member States are intensifying cooperation to strengthen the competitiveness of their ICT industries, expand e-commerce and facilitate digital connectivity, including through working towards the signing of an ASEAN e-commerce agreement and adoption of an ASEAN Digital Integration Framework to facilitate transformation of the region into a competitive global digital hub.

Given the above developments and the promising prospect for investment in the digital economy in the region, this year’s ASEAN Investment Report is very timely.

The 2018 Report looks into the investment landscape and implications of digital economy and e-Commerce in ASEAN, and also discusses the policy options and digital economy strategy for the region.

ASEAN needs to keep the momentum of rising investment in the ICT sector by intensifying its collective effort to narrow the digital divide, develop digital skills, address logistical bottlenecks and payment systems, and manage the potential risks of the digital revolution, as it moves forward to embrace the fourth industrial revolution (4IR).

Dato Lim Jock Hoi
Secretary-General of ASEAN
ASEAN Investment Report 2018 - Foreign Direct Investment and the Digital Economy in ASEAN  (UNCTAD/ASEAN/AIR2018)
11 Nov 2018