Asia-Pacific FDI Forum I
In the recent past, foreign investment and trade has grown rapidly in Asia. As the number of Asian countries investing abroad has increased, there has also been a corresponding rise in the dynamics underpinning these flows. Countries such as China, India, Thailand, Vietnam, Malaysia, Singapore and South Korea, among others, have been looking to leverage foreign investment for economic growth. Some of these countries have been successful in their endeavours and have emerged as top centres for foreign investment. These developing countries have sought to maximize the benefits of outward and inward investment flows to increase FDI, which has led to the emergence of new policy questions for both the home and host countries. Recent trends indicate that this maximization needs to take place whilst mitigating the potential social and environmental costs of FDI.
These new opportunities bring with them risks, and balancing opportunities against risk has been a challenging task for policy makers, researchers, and the civil society. These stakeholders are working towards developing effective and innovative governance structures which will help their countries in navigating the rough seas of FDI and economic welfare and growth, to reach an island where sustainable and inclusive growth prevails.
Foreign investment has always played a pivotal role in most countries’ political economies. The testament to the same is the fact that more than 3,000 (three thousand) investment agreements have been entered into by various states as of this day. International investments, amongst other advantages, have been seen as aiding a host country in developing a sound economic structure, increasing and diversifying manufacturing, offering novel and more developed services, creating employment and developing innovative technology. Furthermore, for home countries, outward investments have been known to bring in long-term capital gains and help build economic and political ties with foreign nations. In some cases, such investment can even ensure access to the critical natural resources of the host country.
To encourage such cross-border capital flows, countries have been taking steps to liberalize rules regarding inward and outward investments and simultaneously creating special regimes that provide incentives and protections for foreign investments and investors.
Measures such as revising domestic legal frameworks, trade and investment policies and developing procedures that enhance the Ease of Doing Business have been popularly adopted by countries in the APAC region. Actions including but not limited to entering into trade and/or investment agreements have also occurred at the bilateral and multilateral level. In conjunction with these measures, countries have also undertaken investment promotion activities such as the development of SEZs, creation of investment promotion agencies and enactment of FDI policies. Additionally, increasing attention is also being paid to whether and how these domestic and international legal frameworks promote foreign investments and are accompanied by laws and policies to regulate the conduct of investors and investments.
In the backdrop of these developments, the Asia-Pacific FDI Forum was created in 2015 to provide a multi-stakeholder platform for discussions on varied topics, included but not limited to regional investment trends, specific features of APAC investment laws and treaties, policy implications, etc. Several key questions that the Forum explored were as follows:
How APAC’s agreements fare with respect to recent global trends in the evolving rules on foreign investments;
The patterns and implications of increasing regionalization in investment rulemaking by Asian countries;
Perceptions and use of investor-state arbitration by Asian investors and against Asian states; and P
The relationship between efforts to increase FDI and efforts to improve governance and inclusive growth and development.