ASEAN FDI Soars to US$224bn, Cambodia Captures US$3.96bn Ranking 7th

• 16 August 2024
• Construction Focus
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ASEAN’s attractiveness as a stable, rapidly growing market has propelled foreign direct investment (FDI) inflows to unprecedented heights, with the region securing an all-time high of US$224 billion in 2022. This investment surge, driven by ASEAN’s burgeoning population and increasing income levels, is also a result of the region’s strategic advantage as a key recipient of global supply chains shifting away from China. Cambodia alone absorbed approximately US$3.96 billion in FDI in 2023, underscoring the region’s ongoing appeal, according to the Manila Times dated 04 August 2024.

Singapore leads the ASEAN bloc as the largest recipient of FDI, securing a staggering US$159.67 billion in 2023, reinforcing its position as a global investment hub. Indonesia followed, attracting US$21.63 billion, with substantial investments in electric vehicles, batteries, nickel processing, and renewable energy from Chinese enterprises. Vietnam and Malaysia also recorded impressive FDI inflows, with US$18.5 billion and US$8.65 billion, respectively, highlighting their growing roles as major players in the region’s industrial and manufacturing sectors.

Cambodia, ranking seventh among ASEAN countries, garnering US$3.96 billion in FDI, marking its continued growth as a vital investment destination in Southeast Asia. Meanwhile, Laos and Myanmar received US$1.67 billion and US$1.52 billion, respectively, reflecting the broader trend of increasing FDI across the region.

The first quarter of 2024 has seen continued momentum, with Vietnam alone attracting over US$4.29 billion in FDI, a 38.6% increase compared to the same period in 2023. Malaysia, on the other hand, secured US$4.24 billion in net FDI during the first quarter, bolstered by Chinese investments in its semiconductor manufacturing industry.

While tax incentives and low costs have traditionally been the primary drivers of FDI, today’s investment climate demands a broader spectrum of considerations. Investment promotion agencies (IPAs) are now focusing on building a strong national image, developing specific supply chains, offering facilitation and solution support, and ensuring policy openness and workforce quality. Stability, proximity to growing markets, and a coherent national strategy have become essential factors in attracting and retaining investment.

As ASEAN continues to emerge as a global investment hotspot, its ability to maintain and enhance these factors will be crucial in sustaining long-term economic growth and prosperity for the region.

• Economy and Finance
• Investment and Funding