The ASEAN Investment Report is an annual report analysing investment and related issues in ASEAN. It is prepared under a technical cooperation arrangement between the ASEAN Secretariat and UNCTAD, supported by the ASEAN-Australia Development Cooperation Program Phase II.
This special report was prepared at the request of the Chairman of the ASEAN Economic Ministers– 26th ASEAN Investment Area Council Meeting. It served as a background document to facilitate discussion at the ministerial meeting in Semarang, Indonesia on 19 August 2023.
In 2022, the global economy was affected by multiple crises, which weighed on global flows of foreign direct investment (FDI). However, ASEAN and a few developing regions bucked the trend. FDI in ASEAN reached the highest level ever recorded, albeit with growing concentration. Rapid economic and industrial growth and opportunities linked with regional integration were key factors. Improving investment environments and efforts by Member States to attract FDI for sustainable recovery, to facilitate economic growth and to strengthen the industrial ecosystem, also played a role. Firms in the region, including many start-ups, small and medium-sized enterprises (SMEs), large firms and foreign multinational enterprises (MNEs) are expanding across ASEAN, upgrading factories, scaling up operations, participating in regional value chains and strengthening supply chain networks.
The purpose of this report is to analyse FDI trends and developments in ASEAN and to identify key emerging issues that will affect the region’s efforts to attract FDI. These emerging issues include international supply chain restructuring, investment in the energy transition, international tax reforms, FDI in sectors relevant to the Sustainable Development Goals (SDGs) and investment in electric vehicle (EV) value chains. The report also looks at intra-ASEAN investment which, while remaining a major source of FDI, has grown more slowly in recent years, highlighting the need to examine its development in the context of the ASEAN Economic Community (AEC).