The investment landscape in Asia and the Pacific: Trends and outlook for investment flows, policies and international treaties

The investment landscape in Asia-Pacific is changing in several important and dynamic ways. Investment flows to the region are increasingly uncertain and inextricably tied to the unfolding of current global and regional political economic risks, such as increased trade tensions and the retreat of multilateralism globally. Despite this uncertainty, Asia-Pacific has simultaneously become the most attractive destination globally for FDI inflows and the largest source of global FDI outflows. Relatedly, intraregional FDI flows have continuously grown over the last decade, reflecting the growing need for more and better inward and outward investment cooperation among the region’s economies. Sectorally, while FDI inflows are still predominantly in the manufacturing sector, they are shifting more and more towards the services sector. Such shifts can offer countries in the region more possibilities to harness value-chain linked sustainable FDI flowing into the region. At the policy level, to a large extent most countries in the region have prioritized implementing policies to attract and facilitate FDI and the success of these policies is undeniably evident in the rapid gains the region has made in terms of increasing its share of global FDI inflows over the last two decades. At the international policy level, Asian and Pacific countries have also actively pursued IIAs and the region is responsible for the largest amount of newly signed IIAs in the last two years combined. Asia-Pacific’s avid pursuit of IIAs underscores the need for more coherence and coordination in international investment treaty making.

Sustainable Development Goals:

Industry, Innovation and Infrastructure