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ASEAN Investment Report 2022 - UNCTAD & ASEAN Secretariat

ASEAN recorded a robust rebound in Foreign Direct Investment (FDI) inflows, surging by 42 percent to reach US$ 174 billion in 2021.

This increase to near pre-pandemic levels reverses the decline in 2020 caused by the COVID-19 outbreak and reflects the attractiveness of the region’s economy for global investors. With a large market and strong regional integration, ASEAN remains a major FDI destination in the developing world – second only to China – and will play an important role in driving global economic recovery.

Intra-ASEAN FDI, which continue to be an important source of FDI as well as the establishment of production networks in the region, has been increasingly driven by emerging opportunities in sectors such as electric vehicles, electronics, digital economy, and green technologies.

Startups – in particular the unicorns – have been critical in driving these new trends and contributing to the Industry 4.0 transformation in ASEAN. At the same time, private equity and venture capital firms have been playing an increasingly active role to support the growth of start-ups, with total assets under management rising rapidly from US$36 billion in 2017 to US$66 billion in 2021.

  • Inflows of foreign direct investment (FDI) in ASEAN increased by 42 percent in 2021 to $174 billion, the pre-pandemic record level (figure 1). The rebound underscores the resilience of the region, which has been battered by successive waves of the pandemic.

  • The recovery in ASEAN compares favorably with the 30 percent average growth in developing economies (WIR 2022).

  • Six Member States recorded a rise in inflows and in two, inflows remained flat. This contrasted with the situation in 2020 when only two Member States recorded a rise.

  • ASEAN remained a top recipient of FDI in developing regions (second after China in 2021) and continued to be an engine of growth. The region’s share of global FDI inflows rose from a pre-pandemic annual average of 7 percent in 2011–2017, to 11 percent in 2018–2019, to 12 percent in 2020–2021. Strong inflows pushed up FDI stock in the region to $3.1 trillion, an increase of 72 percent from 2015 ($1.8 trillion).

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