Investment flows to developing Asian countries to fall 30% to 45% due to COVID-19

Foreign direct investment (FDI) to developing economies in Asia, hit hard by the economic downturn caused by the coronavirus pandemic, are projected to decline by up to 45% in 2020

Published

8 months ago

July 3, 2020

Headline Editor

Global flows of foreign direct investment (FDI) will be under severe pressure this year as a result of the COVID-19 pandemic.

These vital resources are expected to fall sharply from 2019 levels of $1.5 trillion, dropping well below the trough reached during the global financial crisis and undoing the already lackluster growth in international investment over the past decade.

Foreign direct investment (FDI) to developing economies in Asia, hit hard by the economic downturn caused by the coronavirus pandemic, is projected to decline by up to 45% in 2020, according UNCTAD’s World Investment Report 2020.

Investment from South-East Asia declined from $63 billion in 2018 to $56 billion, primarily
because of a drop in investment from Indonesia and Thailand.

Flows to developing countries will be hit especially hard, as export-oriented and commodity-linked investments are among the most seriously affected.

The South-East Asia region is experiencing a significant economic slowdown, including a major disruption of production and supply chains in many industries.

Lockdown measures have led to factory stoppages. Major automotive manufacturers in Thailand such as Mazda, Mitsubishi and Nissan (all Japan) have temporarily halted production.

Ford (United States) has temporarily suspended production in Thailand and Viet Nam, while Toyota (Japan) has done the same at plants in Indonesia and Thailand.

Bleak prospects for 2020

The number of announced greenfield investments in the first quarter of 2020 dropped by 37%. The number of mergers and acquisitions (M&As) fell by 35% in April 2020.

“Lockdown measures and factory stoppages impacted supply chain and factories’ production in the region. Falling corporate earnings, a slump in global and regional demand and economic slowdown have led multinational enterprises (MNEs) to postpone investment plans.”
UNCTAD’s director of investment and enterprise, James Zhan.

The pandemic will precipitate a fall in reinvested earnings of foreign affiliates based in the region, affecting investment. It underscored the vulnerability of these supply chains and the significance of the role of China and other Asian economies as global production hubs.

Outward FDI is also expected to fall as a result of liquidity challenges faced by companies from the region.

A global economic recession will further weigh on inflows to and outflows from the region. Economic growth in Asia is expected to stall to 0%.

South-East Asia

Following high inflows in 2019, South-East Asia has not been spared the impact of the pandemic.

South-East Asia, with FDI rising by 5% to a record level of $156 billion, continued to be the region’s growth engine in 2019. The growth was driven by strong investment mainly in Singapore, Indonesia and Viet Nam. The three countries received more than 80% of inflows in South-East Asia in 2019.

Robust investment from Asian economies, United States and within the Association of Southeast Asian Nations (ASEAN) pushed up inflows. Manufacturing and services continued to underpin inflows to South-East Asia.

FDI flows to some ASEAN member States (e.g., Myanmar, the Lao People’s Democratic Republic and Thailand) fell. Investment to Malaysia was flat.

Business

THAI airways to sell training center building to raise more funding

THAI airways has been hit hard by limited travel due to the COVID-19 pandemic, which comes as they were entered bankruptcy protection and sit on the verge of liquidation.

Published

5 hours ago

February 26, 2021

Headline Editor

THAI airways is selling its Laksi training center building, in the Bangkhen district of Bangkok, its Nok-Air shares, its Bangkok Aviation Fuel Services (BAFS) shares and Boeing 737- 400 engines, after the bankruptcy court gave the go-ahead to do so.

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Ecommerce

Will Covid-19 unleash a new generation of digital nomads?

Published

7 hours ago

February 26, 2021

Oxford Business Group

Will Covid-19 unleash a new generation of digital nomads?

– Covid-19 has facilitated the widespread adoption of remote working
– Despite travel restrictions, countries are seeking to attract digital nomads
– Dubai and Mexico have emerged as key destinations for foreign remote workers
– As travel resumes, many anticipate a new wave of roaming digital nomads

With Covid-19 facilitating the widespread adoption of remote working practices, some emerging markets are seeking to attract digital nomads through a series of incentives and special visas.

Despite border closures and travel restrictions resulting from the virus, various countries are stepping up efforts to incentivise the movement of so-called digital nomads – people who work remotely and relocate relatively freely.

For example, in October the Dubai government launched its virtual working programme, an initiative that gives foreign professionals the opportunity to move to the emirate and continue to work remotely in their current jobs.

The one-year programme, launched after Dubai reopened its borders to international tourists in July last year, is designed is attract professionals, entrepreneurs and those working in start-ups.

Given its strong ICT infrastructure and healthy start-up scene, Dubai has been seen as an increasingly attractive option for digital nomads in recent years, with officials marketing the emirate as a place where people can live and work by the beach.

As a further incentive, in January officials began offering free vaccines to those on the programme.

Health

200,000 doses of COVID-19 vaccine Distributed to 13 Thai provinces

Health authorities are now expected to give the first injection of this COVID-19 vaccine on 1st March, with a subcommittee now working on the priority system which will determine who gets the vaccine first.

Published

1 day ago

February 25, 2021

National News Bureau of Thailand

BANGKOK (NNT) – The first 200,000 doses of COVID-19 vaccine which arrived in Thailand today will be distributed to 13 provinces, with frontline health workers and those at higher risk, being the first to receive the vaccine.

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