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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

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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.

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National

Thailand to further ease COVID-19 restrictions

The Cabinet approved to ease the level of control over the country under the COVID-19 situation including relaxing businesses and activities in 4 areas.

National News Bureau of Thailand

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The Cabinet approved to ease the level of control over the country under the COVID-19 situation including relaxing businesses and activities in 4 areas.

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Economics

BoI plans more efforts to promote BCG economy

National News Bureau of Thailand

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BANGKOK (NNT) – The Board of Investment (BoI) is working with related agencies to rev up promotion of the bio-, circular and green (BCG) economy to help drive growth over the next 5 years.

BoI Secretary-General Duangjai Asawachintachit said the BoI is looking into more business categories for high technology as part of efforts to promote the BCG economy.

She said the government is focused on developing the bio-economy as Thailand has more than 30 million people working in the farm sector, yet most of them remain in poverty.

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Asean

ASEAN, Canada, UN Women launch 5-year programme to advance Women, Peace and Security Agenda

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Joint Press Release ASEAN, Canada, UN Women jointly launch 5-year programme to advance Women, Peace and Security Agenda
Jakarta/Ottawa/New York, 24 February 2021 – The Association of Southeast Asian Nations (ASEAN), Canada and UN Women jointly launched today a five-year programme to expand and strengthen women’s leadership and participation in conflict prevention, resolution and recovery in South-East Asia.

The CAD 8.5 million (US $6.36 million) programme, “Empowering women for sustainable peace: preventing violence and promoting social cohesion in ASEAN”, is funded by Global Affairs Canada to support ASEAN and the implementation of the ASEAN-Canada Plan of Action 2021-2025, with the support of UN Women as a lead UN partner.

“Canada is proud to launch this flagship initiative that uses the women, peace and security approach to promote inclusive and sustainable peace and security in the region, while addressing the systemic gender inequality,” said Diedrah Kelly, Canada’s Ambassador to ASEAN.

ASEAN has made important strides to advance women, peace and security agenda, including the adoption of the first ‘Joint Statement on Promoting Women, Peace and Security in ASEAN’ in 2017, the launch of the ASEAN Women’s Peace Registry in 2018, and convening the first ASEAN Symposium on Women, Peace and Security in 2019 and the ASEAN Ministerial Dialogue on Strengthening Women’s role for Sustainable Peace and Security in 2020.

Secretary-General of ASEAN Dato Lim Jock Hoi said, “ASEAN is working concertedly to advance women, peace and security agenda across the three ASEAN Community Pillars as part of our commitment to promote gender equality and the roles of women in the implementation of the ASEAN Comprehensive Recovery Framework.”

The COVID-19 impact has increased the risks for women and girls in fragile and conflict-affected contexts and this challenges us to re-examine threats to human security. “The pandemic highlights the important linkage between peace, humanitarian and development and the critical need for women’s leadership and participation to ensure effective and comprehensive response, from policy decision-making to peace building and pandemic response,” said Jamshed Kazi, UN Women Representative and Liaison to ASEAN.

The new programme reflects the commitment of ASEAN and Canada to promote gender equality and to respond to an increasingly widespread calls across the globe for women to be empowered to lead and participate in peace and development.

ASEAN includes Brunei, Cambodia, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Viet Nam.

For more information, please contact:
Montira Narkvichien
Regional Communications Specialist
UN Women Asia and the Pacific
Tel: +66 2 288 1579 | Mobile: +66 81 6688900 | Email: [email protected]

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