ASEAN Investment Flows in 2022 Grow 5 Percent Outperforming Developed Countries

Illustration. (Photo: Doc. Antara)

JAKARTA - Minister of Investment/Head of BKPM Bahlil Lahadalia said investment flows to ASEAN in 2022 will grow 5 percent beyond the global level and developed countries.

This was conveyed by Bahlil at the 26th ASEAN Investment Area (AIA) Council Meeting in Semarang, Central Java, Saturday, August 19 which was attended by all ASEAN members and representatives of the United Nations Conference on Trade and Development (UNCTAD).

"There is a stark contrast to the difference in investment flows to developing countries which have increased by 4 percent with global investment flows and also developed countries. Investment flows to Southeast Asia have even increased by up to 5 percent, surpassing the global level and developed countries. Southeast Asian ministers have been successful in terms of attracting investment to this region," he said, quoted from Antara, Sunday, August 20.

UNCTAD through the Special ASEAN Investment Report (AIR) 2023 reports that ASEAN investment growth in 2022 will increase by 5 percent with a total investment of USD 224 billion.

This achievement is the highest record in history amid world investment flows which fell by up to 12 percent in the same year. The decline in investment growth was dominated by developed countries which was spurred by the wars between Russia and Ukraine which resulted in increases in world food and energy prices.

Responding to the report, Bahlil as the AIA Council Chair conveyed that the data is in line with the theme of the 2023 ASEAN Indonesia Chair that this region is the center of world growth or the Epicentrum of Growth.

However, Bahlil emphasized the importance of prioritizing the principle of equal investment because according to him, less than 1 percent of the ASEAN population enjoys FDI flows.

"The concentration of FDI in a handful of groups will threaten the unity of ASEAN in the future. In 2022, 60 percent of FDI entering ASEAN will only be enjoyed by less than 1 percent of the ASEAN population. Going forward, ASEAN needs to foster more concrete collaboration in efforts to promote and facilitate investment so that ASEAN can truly become one community, one home, one family," he said.

The UNCTAD report also underlined the sharp increase in manufacturing growth in ASEAN. In 2020, during the pandemic, manufacturing growth continued to grow, reaching 11 billion US dollars when the whole world was also in a slump. But the recovery in ASEAN is fast.

It is proven that in 2021 it experienced a growth spike of 400 percent to US$55 billion and was still able to increase in 2022 to US$62 billion.

The 26th AIA Council Meeting is part of the ASEAN Economic Ministers' (AEM) Meeting which was attended by representatives from ten ASEAN countries who are in charge of investment issues.

UNCTAD is supported by the Government of Indonesia in compiling the 2023 Special ASEAN Investment Report (AIR) study. This study contains the theme International Investment Trends: Key issues and policy options, which outlines global FDI trends and policies related to FDI in the world, issues new issues that arise, as well as policy choices related to the new issues in question.