ASEAN expects foreign investment to keep growing after it surged 48 percent last year to a new record, but the region must redouble efforts to catch up with China, officials said yesterday.
Foreign direct investment into the 10-member ASEAN rose to US$38 billion last year, surpassing levels last seen before the 1997-1998 Asian financial crisis, Malaysia's Trade Minister Rafidah Aziz said.
Foreign investment into ASEAN rose to US$34 billion in 1997, but declined sharply after the Asian financial crisis threw regional economies into disarray.
"We have been in the doldrums. There have been so many uncertainties and internal problems for some countries. Economically, there is global dislocation, hike in petroleum prices and the dollar has weakened," Rafidah told reporters after chairing an ASEAN investment council meeting.
"In spite of that, we were able to see a positive growth in our FDI and that is a good sign," she said. "We expect it to increase."
In the first quarter of this year, foreign direct investment into ASEAN soared 90 percent from the same period last year to US$14 billion and will be on the "upward momentum," she added.
In a statement, the ASEAN investment council said the US, Britain, Japan, France and Finland accounted for nearly half of total FDI flows into the region last year, mainly to Singapore, Indonesia, Thailand and Malaysia.
The manufacturing sector was the top FDI recipient, with approved investment in ASEAN increasing 33 percent on-year to US$27.8 billion last year, it said.
Rafidah said ASEAN nations must be more aggressive in promoting the bloc as a single investment zone and accelerate opening up its industries to catch up with China, which attracts more than US$50 billion a year.
"China is way above us," she said. "In some areas, we are not up to the mark. We have to improve."
ASEAN Secretary-General Ong Keng Yong said the bloc must remove bureaucratic limits hindering regional economic integration.
"It's overregulation ... we believe that for the coming year if we strengthen our attractiveness as an ASEAN destination rather than as individual member countries, we can run with [China]," he said.
"We can't beat the Chinese. They are the most attractive market in the world but at least we will not be too far behind," he said.