In this webinar, Mr Marc Proksch and Mr Tan Tai Hiong discussed the importance and development of investment facilitation at the multilateral and regional levels and how enhancements in investment facilitation and investment promotion activities can attract new investments, improve investment retention and promote re-investments from investors interested in ASEAN.
ASEAN STUDIES CENTRE WEBINAR
Thursday, 22 April 2021 – The ASEAN Studies Centre, ISEAS – Yusof Ishak Institute organized a webinar “Investment Facilitation: Advancing Investments in ASEAN” jointly delivered by Mr Marc Proksch, Chief of the Private Sector and Development Section of the Trade and Investment Division of UNESCAP as well as Mr Tan Tai Hiong, Assistant Director and Head of the Services and Investment Division of the ASEAN Secretariat.
Mr Proksch kicked off the webinar with an overview on investment facilitation and shared that it had been a hot topic since the 1990s. Today, investment facilitation remains important due to the gap between investment realization and approved investment projects as not all approved projects were realized. In fact, only 20-30% of approved projects are eventually realized due to investors meeting obstacles, not having sufficient infrastructure and facing non-cooperative local governments, among other issues. Investment facilitation plays an important role in realizing investments and the core values include transparency, simplicity, predictability and stability. Mr Proksch shared that the customers of Investment Promotion Agencies (IPAs) are the investors and existing investors could become important partners in promoting investments in the country. As such, Mr Proksch highlighted that IPAs should also focus on providing information and aftercare services for their existing investors.
Globally, there had been initiatives by various multilateral organizations such as APEC, BRICS, OECD, G20, UNCTAD and WTO to develop a framework on investment facilitation. Mr Proksch added that the Covid-19 pandemic has also redrawn the landscape for investment facilitation. Beyond the Asia Pacific region, Mr. Proksch also summarised the current negotiations on a WTO agreement on investment facilitation for development.
In his presentation, Mr Tan shared that while ASEAN remained an attractive destination for global FDI, ASEAN economies are expected to contract in 2020 due to the Covid-19 pandemic but the region is expected to rebound this year. The legal framework for ASEAN investment integration is the ASEAN Comprehensive Investment Agreement with the 4 pillars of liberalization, protection, facilitation and promotion. To improve ASEAN’s investment regime and facilitate investment, an ASEAN Investment Peer Review has been conducted annually since 2012 under the ASEAN Coordinating Committee on Investment. The review allows ASEAN member states to share and exchange updates on their efforts to facilitate investments.
Mr Tan highlighted that the Covid-19 pandemic has made investment facilitation work more important for IPAs. Mr Tan agreed with Mr Proksch that the focus for IPAs has shifted from marketing to intense aftercare with the IPAs playing an important and useful role during the pandemic. The pandemic had also changed the way IPAs operate, with increased digitalization and focus on sustainable sectors. All in all, the pandemic has provided ASEAN with an opportunity to improve existing initiatives to attract and retain investments in order to contribute to the recovery of ASEAN economies post-pandemic.
The Q&A discussion touched on several related issues such as the key elements for a potential ASEAN Framework for Investment Facilitation (AFIF), the timeline for the development of the framework, the possibility of harmonizing incentives under the framework, the potential need for dispute resolution under the framework, the low share of intra-regional investments within ASEAN, capacity building for investment facilitation and IPAs, the inclusion of sustainable development issues in the proposed AFIF, as well as the possibility of ASEAN having a common position on the investment facilitation in the ongoing structured discussions on investment facilitation for development at the WTO.
Around 40 attendees from the policy, business and research communities in Singapore and the region attended the webinar.