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Improved infrastructure investment recorded in East, SE Asia
International investment in infrastructure has been on the rise, with intra-regional foreign direct investment (FDI) being a major driving force in East and Southeast Asia, a newly published United Nations (UN) investment report reveals
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nternational investment in infrastructure has been on the rise, with intra-regional foreign direct investment (FDI) being a major driving force in East and Southeast Asia, a newly published United Nations (UN) investment report reveals.
The UN Conference on Trade and Development (UNCTAD) World Investment Report 2015 released on Thursday reveals that connectivity between countries and economies is intensifying across a number of parameters.
'Infrastructure is a primary component of regional connectivity, especially in electricity, telecommunications, transport and water industries,' said the report.
Nevertheless, it says, uneven development in infrastructural connectivity between countries, sub-regions and sectors persists.
More recently, the report states, new initiatives at national, regional and international levels are increasing the prospects for expansion of infrastructure investment and connectivity across the region, and beyond.
'Multinational enterprises are major investors in infrastructure and thereby contribute to enhance regional connectivity,' the report says.
'Inward FDI stock data of some major economies in the region demonstrate that the overall scale of foreign infrastructure investment in some economies is very large.'
In East Asia, for example, FDI stock in transport, storage and telecommunications had reached US$33 billion in Hong Kong by the end of 2012. In Southeast Asia, FDI stock in the same sectors stood at $37 billion in Singapore and $15 billion in Thailand, also in the same year.
The report says, however, that equity investment by multinationals in infrastructure in the region has regained strength.
'In 2014, the value of cross-border mergers and acquisitions (M&As) in infrastructure industries nearly tripled to reach $17 billion. Despite a drop in announced greenfield projects, international investment in infrastructure has demonstrated significant growth over the past two years,' said the UN report.
It is further revealed rising intra-regional FDI flows are contributing to international investment in infrastructure development and connectivity.
'In general, the rise in intra-regional FDI has provided an impetus to intensified infrastructural connectivity, with China, Hong Kong, Japan, Malaysia and Singapore being among the most important sources of investment and operations,' said the report.
'An estimated 45 percent of outward investment by Asian multinationals in infrastructure industries targeted their own region. Intra-regional projects accounted for a much higher share in cross-border M&As than announced in greenfield projects.' (ebf)(+++)
