Asean FDIs may hit US$80b
KUALA LUMPUR: The Association of Southeast Asian (Asean) region will likely see foreign direct investments (FDIs) double to about US$80 billion (RM240 billion) annually when the Asean Economic Community comes into effect in 2015.
Deputy secretary-general Puspanathan Sundram said with trade facilitation and connectivity and transportation put in place, the region will attract more than the 3.4 per cent global FDIs currently.
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"Services sectors also need to be looked at. If we want to be a big player and attract investments, human capital must be right and there must be more movement of skilled labour," he said at a media briefing after a dialogue session between Asean and the Federation of Japanese Chamber of Commerce and Industry (FJCCIA) here yesterday.
"Investors are keenly looking at Asean as a single entity through a single agreement where they can exercise, for instance, the 'division of labour' choice of having a regional hub in Singapore or Malaysia with production facilities in Laos."
Apart from a tariff nomenclature next year, Sundram said harmonisation of standards is also on course for the electrical and electronics as well as cosmetics and pharmaceutical industries to enable Asean to operate as a single market
He also highlighted the continued support of Japanese investments in the region, despite the country's triple disaster in March this year.
Japan has been the top source of FDIs for Asean, registering US$5.2 billion (RM15.6 billion) in 2009. It is also an important source of investments with a 13.4 per cent share of total inward investments in 2009.
In Malaysia alone, to date, there are more than 1,500 Japanese companies operating with capital investment totalling more than US$18.7 billion (RM56.1 billion).
Yasuo Hayashi, president of the Japan External Trade Organisation, said the decision-making for investments in foreign countries has been improving and will be back to normal soon.
FJCCIA Asean chairman Takashi Hibi said Japanese companies have been in the recovery stage since June and are catching up on the delays in production and operations.
"Business headquarters in Japan are prioritising the Asean region manufacturing operations in their recovery."
The FJCCIA, with its 4,441 members, is seeking Asean economies to simplify the customs procedures through the Asean Green Lane system, simplify Asean Free Trade Area documentation and harmonise product standards.
"We see Asean as one big strategic market and manufacturing hub. To ensure the free flow of goods, human resources and capital as well, we ask each Asean country to develop good infrastructure and rules and regulation - to buck up liberalisation (of the market)."
The FJCCIA also wants to see maritime and road security enhanced in the region.
Since the Asean Free Trade Agreement became a reality on January 1 last year, duties on almost 80 per cent of the tariff lines in all member countries have been eliminated.
Japan overtook the European Union as Asean's second largest trading partner in 2010, with 10.6 per cent of the region's total trade.
Earlier, International Trade and Industry Minister Datuk Seri Mustapa Mohamed suggested the FJCCIA dialogue with the Asean secretary general to be expanded to include not just free-trade agreement implementation issues but also new strategies to strengthen Asean-Japanese economic linkages.
He suggested an "Invest Asean" seminar specifically for Japanese companies.
Several symposiums on specific sectors such as automotive, electrical and electronics, small- and medium-sized enterprises and agro-based industries were held yesterday.
Meanwhile, Japan's Minister of Economy, Trade and Industry Banri Kaieda and other Asean economic ministers, together with the Asean secretary-general Dr Surin Pitsuwan, will meet members of the FJCCIA today.
This is the first time a ministerial level dialogue is being held with the FJCCIA to obtain feedback from the Japanese companies and find ways to enhance Japan's investments in the region.
The meeting will be co-chaired by Indonesia's Trade Minister Dr Mari Elka Pangestu, who is the chairman of the Asean Economic Ministers.
Deputy secretary-general Puspanathan Sundram said with trade facilitation and connectivity and transportation put in place, the region will attract more than the 3.4 per cent global FDIs currently.
"Investors are keenly looking at Asean as a single entity through a single agreement where they can exercise, for instance, the 'division of labour' choice of having a regional hub in Singapore or Malaysia with production facilities in Laos."
Apart from a tariff nomenclature next year, Sundram said harmonisation of standards is also on course for the electrical and electronics as well as cosmetics and pharmaceutical industries to enable Asean to operate as a single market
He also highlighted the continued support of Japanese investments in the region, despite the country's triple disaster in March this year.
Japan has been the top source of FDIs for Asean, registering US$5.2 billion (RM15.6 billion) in 2009. It is also an important source of investments with a 13.4 per cent share of total inward investments in 2009.
In Malaysia alone, to date, there are more than 1,500 Japanese companies operating with capital investment totalling more than US$18.7 billion (RM56.1 billion).
Yasuo Hayashi, president of the Japan External Trade Organisation, said the decision-making for investments in foreign countries has been improving and will be back to normal soon.
FJCCIA Asean chairman Takashi Hibi said Japanese companies have been in the recovery stage since June and are catching up on the delays in production and operations.
"Business headquarters in Japan are prioritising the Asean region manufacturing operations in their recovery."
The FJCCIA, with its 4,441 members, is seeking Asean economies to simplify the customs procedures through the Asean Green Lane system, simplify Asean Free Trade Area documentation and harmonise product standards.
"We see Asean as one big strategic market and manufacturing hub. To ensure the free flow of goods, human resources and capital as well, we ask each Asean country to develop good infrastructure and rules and regulation - to buck up liberalisation (of the market)."
The FJCCIA also wants to see maritime and road security enhanced in the region.
Since the Asean Free Trade Agreement became a reality on January 1 last year, duties on almost 80 per cent of the tariff lines in all member countries have been eliminated.
Japan overtook the European Union as Asean's second largest trading partner in 2010, with 10.6 per cent of the region's total trade.
Earlier, International Trade and Industry Minister Datuk Seri Mustapa Mohamed suggested the FJCCIA dialogue with the Asean secretary general to be expanded to include not just free-trade agreement implementation issues but also new strategies to strengthen Asean-Japanese economic linkages.
He suggested an "Invest Asean" seminar specifically for Japanese companies.
Several symposiums on specific sectors such as automotive, electrical and electronics, small- and medium-sized enterprises and agro-based industries were held yesterday.
Meanwhile, Japan's Minister of Economy, Trade and Industry Banri Kaieda and other Asean economic ministers, together with the Asean secretary-general Dr Surin Pitsuwan, will meet members of the FJCCIA today.
This is the first time a ministerial level dialogue is being held with the FJCCIA to obtain feedback from the Japanese companies and find ways to enhance Japan's investments in the region.
The meeting will be co-chaired by Indonesia's Trade Minister Dr Mari Elka Pangestu, who is the chairman of the Asean Economic Ministers.
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