Teflon Thailand v Indonesia – both winning FDI inflows

SINGAORE - Contrary to popular perception, Thailand is continuing to attract strong Foreign Direct Investment inflows, particularly from economies such as Japan that have already put considerable investments into the manufacturing sector, according to a new research report by ANZ Bank.

“Given the persistence of political strife and an economic performance that has seen the economy mired near recessionary growth levels for the past year, this is a remarkable outturn,” the report says. “It also highlights that there are more structural determinants, such as the demographic endowments of an economy, that are more important FDI-pull factors than mere growth alone.
“The moniker “Teflon Thailand” therefore appears to be an appropriate one!”
But the report says Thailand is not the only ASEAN member attracting FDI from more mature and high cost economies seeking to migrate production platforms to lower labour cost centres.
“The Chairman of the Indonesia Investment Coordinating Board, Mahendra Siregar, will soon be leading a delegation to visit Japan, South Korea, China, the US and Europe to promote the establishment of key manufacturing and industrial zones in central and east Java,” it says.
“(But) it appears Mr Siregar may well be preaching to the converted. The data and survey evidence reveals Indonesia is already outperforming ASEAN peers in the amount of FDI it is attracting – particularly from Japan. Indeed, Indonesia has now overtaken both China and India to be considered the “most promising” country for Japanese companies for business development, according to a recent Japan Bank for International Cooperation Survey.” www.live.anz.com (ATI).