Asia-Pacific Foreign Investment Brief
The FDI, Trade, and Economic Development Community

The Chinese tech company has pioneered a ‘Scope 3+’ concept that goes beyond conventional value chain emissions reduction and is targeted at empowering businesses on its platforms to go low-carbon. It brings to Malaysia its suite of AI-based sustainability tools. For Malaysian firm UEM Edgenta, greenhouse gas emissions tracking has for a long time been a manual process. The Kuala Lumpur-based asset management and infrastructure company, keen to calculate and report across its Scope 1 to 3 emissions, had been looking to streamline its environment, social and governance (ESG) strategies. It also wanted to simplify its sustainability reporting processes for a compliance exercise that it was undertaking, but found that it lacked the technological capabilities to do so. Hence, last year, when Alibaba Cloud, the digital technology and intelligence backbone of Alibaba Group, expressed interest to work with more companies to adopt its artificial intelligence (AI) sustainability tools and solutions, UEM Edgenta was one of the firms eager to pursue the partnership. It made a huge leap in transforming its business strategy into a technology-driven one, and among the new solutions it adopted was Energy Expert, a software-as-a-service tool for energy consumption and carbon management. UEM Edgenta has since integrated the tool developed by Alibaba Cloud, which is capable of helping enterprises obtain real-time sustainability performance statistics and identify emissions sources, into its own cloud-based data platform. In September last year, the firm launched a set of climate targets and announced its commitment to achieve net-zero greenhouse gas emissions by 2050. A key thrust of its decarbonisation strategy is enhancing energy efficiency of its operations. In China, home to some of the world’s largest technology companies, cloud computing has played a pivotal role in facilitating energy-light digitalisation. Unlike the traditional use of localised hardware and servers for data storage, cloud computing uses web-based infrastructure, eliminating the need to construct sizeable server farms and substantially reducing operational carbon emissions. Industry insiders believe it provides unprecedented opportunities for decarbonisation through the integration of data intelligence and AI technologies. VIEW ARTICLE

Australia will launch Investment Deal Team hubs in Singapore, Jakarta, and Ho Chi Minh City, with additional Deal Team representatives across the ASEAN region. But are regional IPAs and governments prepared with Investor-Ready Projects? Announced by Prime Minister Albanese at the launch of Invested: Southeast Asia Economic Strategy to 2040, the Deal Teams will work with governments and businesses in Southeast Asia to identify and facilitate outbound investment opportunities for Australian investors. They will draw on public and private sector expertise to identify a pipeline of investment-ready projects, provide market intelligence, and advise Australian investors on matters from regulatory approvals to finding local commercial partners. The $70.2 million Deal Teams involve experts from Austrade, the Department of Foreign Affairs and Trade (DFAT), and Export Finance Australia (EFA), and form part of the Government's implementation of Invested: Southeast Asia Economic Strategy to 2040. They will also support businesses to access the newly announced $2 billion Southeast Asia Investment Financing Facility, administered by EFA, and other trade and investment initiatives to facilitate and crowd in Australian private sector investment across Southeast Asia. VIEW ARTICLE

Foreign direct investment (FDI) has immense potential to accelerate progress towards #GenderEquality, but is this promise being fulfilled? By Heather Taylor-Strauss, economist and FDI lead at the United Nations Economic and Social Commission for Asia and the Pacific In my latest piece for fDi Intelligence, I dive deep into the crucial need for data and evidence to validate FDI's transformative impact on women's empowerment. Gender specialists, FDI authorities, policymakers - this is a must-read as we approach the UN's summit on catalyzing action for #SDG5 later this month in New York. It's time to move beyond assumptions. Rigorous case studies, impact assessments, and gender-focused metrics are essential to channeling FDI as a driving force for: ✨ Closing gender pay gaps ✨ Promoting women's leadership ✨ Providing inclusive opportunities ✨ Advancing gender-responsive policies Read, share your perspectives, and join the call for building and disseminating a compelling evidence base at the FDI project level to leverage the full potential of #FDI for #WomenEmpowerment #InvestmentPromotion #GenderLens #EconomicDevelopment #GlobalGoals And let's also take a moment today - on #internationalwomensday2024 to applaud all those the investment promotion agencies (Investment Fiji Pakistan Board of Investment @Malaysia Development Authority Invest India InvestChile Philippine Board of Investments (BOI)) and FDI practitioners (Stephania Bonilla-Feret Phd ambreen iftikhar Vanessa Séverin Andreas Dressler Michelle Wong Kathryn Rothwell Laura Figón Tom Becker Musarat Ali Dr. Kim J. Zietlow) who are all pioneering and pushing for integrating gender into investment promotion, attraction, and facilitation. Together we are paving the way and encouraging others to #domore! (and of course apologies for all those that I may have missed in the tags!) VIEW ARTICLE

When developing countries borrow money, they have to pay much higher interest rates compared to developed countries. This makes it difficult for them to fund important investments, which undermines debt sustainability & sustainable development. Explore the United Nations' “A World of Debt” report, including a debt dashboard & an interactive map with country-specific data. Public debt can be vital for development. Governments use it to finance their expenditures, to protect and invest in their people, and to pave their way to a better future. However, it can also be a heavy burden, when public debt grows too much or too fast. This is what is happening today across the developing world. Public debt has reached colossal levels, largely due to two factors. Financing needs soared with countries’ efforts to fend off the impact of cascading crises on development. These include the COVID-19 pandemic, the cost-of-living crisis, and climate change. An inequal international financial architecture makes developing countries’ access to financing inadequate and expensive. The weight of debt drags down development. Debt has been translating into a substantial burden for developing countries due to limited access to financing, rising borrowing costs, currency devaluations and sluggish growth. These factors compromise their ability to react to emergencies, tackle climate change and invest in their people and their future. Countries are facing the impossible choice of servicing their debt or serving their people. Today, 3.3 billion people live in countries that spend more on interest payments than on education or health. A world of debt disrupts prosperity for people and the planet. VIEW REPORT

The Significant Investments Review Bill will introduce a new investment management regime for specified entities identified as being critical to national security, says Trade and Industry Minister Gan Kim Yong. The new Bill aims to provide Singapore with an “updated toolkit” to manage threats posed by significant investments into critical entities in an increasingly complex world, says Trade and Industry Minister Gan Kim Yong Entities designated as critical will be required to notify or seek approval from the authorities for ownership or control changes During the debate in parliament, MPs raised concerns over what constitutes national security interests, the wide-ranging powers given to the Trade and Industry Minister in the Bill and the possible impact on foreign investments WHY IS THIS NECESSARY? The need for an updated regulatory toolkit comes amid an increasingly complex world and an uncertain economic environment, said Mr Gan, citing several global financial crises in recent years and the COVID-19 pandemic that led to border restrictions and supply shortages. Geopolitical contestations have also triggered more protectionist measures, while military conflicts have brought about disruptions to critical supplies such as energy and food. “This has led to many countries prioritising domestic and national security considerations, leaning towards ‘near-shoring’, ‘friend-shoring’ and ‘re-shoring’ of supply chains,” he told the House. VIEW ARTICLE

UNCTAD has just released its latest Investment Policy Monitor (No. 27).  It discusses trends in outward foreign direct investment (OFDI) policies. Overall, the Monitor shows that policies to facilitate outward FDI are becoming more widespread, but so are policies that restrict outward FDI. The number of countries that facilitate outward investment to promote sustainable development is still limited. Highlights include: OFDI promotion initiatives are common among developed countries, present in 79 per cent of them, reflecting their role as traditional sources of FDI. Support for companies that invest abroad typically serves two main objectives. First, the growth and internationalization of domestic businesses, particularly SMEs. Second, the promotion of international cooperation and development efforts. An increasing number of developing countries are also supporting their firms in investing overseas (14 per cent), in line with their expanding role as sources of FDI. Supporting the internationalization of domestic firms and securing access to new markets, resources and technologies are the main objectives of these policies. Sustainability considerations and the potential benefits to the host country’s development increasingly feature among the qualifying criteria for OFDI policy support, particularly among developed countries. However, despite international commitments in the context of the SDGs, only 18 developed and 5 developing economies have adopted OFDI promotion schemes targeted at promoting investment specifically in developing countries. Nearly half of the world's economies impose restrictions on OFDI, including most developing countries and least developed countries (LDCs). In these countries, restrictions traditionally aim at preventing balance of payment difficulties and to ensure that investments abroad do not adversely affect the home country's economic priorities. OFDI restrictions have surged across economies at all levels of development in the last decade. Efforts to comply with anti-money laundering standards and concerns over the potential national and economic security risks posed by OFDI contributed to the rise. As OFDI restrictions become more widespread, the complexity of applicable rules and regulatory discretion may reduce predictability and increase the administrative burden for home country authorities and investors. VIEW ARTICLE

It is more urgent than ever for governments to attract foreign investment. Excellent interview by Alex Irwin-Hunt, FDI Intelligence 1️⃣ Huge accumulation of public debt, particularly in developing countries, has made it more difficult for governments to invest – thus also weighing on economic growth. Foreign direct investment (#FDI) is a way for countries to bring in more capital without the need to borrow more. 2️⃣ The fragmentation of global trade and investment networks has a net negative impact on the global economy. Indeed, global trade of goods declined by 2.2% in 2023, compared to a year earlier. Distortions and trade restrictive policies are weighing on the global economy. 3️⃣ Competition for foreign investment is fiercer than ever. Incentives and other concessions have become increasingly used by governments, especially in Europe and North America. Developing countries must undertake reforms to improve institutions and policies in their bid to attract FDI. VIEW ARTICLE

With almost half of the world’s population residing in countries holding executive or legislative elections in 2024, it’s set to be the busiest election year ever recorded. This visualization uses collated 2024 global elections data from our 2024 Global Forecast Series as well as from Time, while country populations are taken from Worldometer as of January 2024. VIEW ARTICLE

Southeast Asian startups' salaries for new hires in business development and sales have risen by as much as 20%, according to an annual report published Thursday, reflecting young companies' urgent need to generate cash amid a tougher funding environment. Meanwhile, engineering roles saw the biggest decline in salaries, impacted by ongoing tech layoffs and cost-cutting measures. Average salaries for business development and sales increased more than those for four other key roles -- engineering, marketing, data and product development -- in 2023, up by an average of 2% from a year earlier, according to the Singapore-based staffing platform Glints and the venture capital firm Monk's Hill Ventures. The annual report analyzed more than 10,000 data points from Glints' job postings for startup roles in Singapore, Indonesia and Vietnam, as well as interviews with over 70 early-stage startups in the region. According to the study, engineering roles saw the biggest decline in salaries, impacted by ongoing tech layoffs and cost-cutting measures. These factors led to an increased supply of available tech talent, putting downward pressure on salaries. Salaries for engineers fell 2% last year, with junior roles seeing the sharpest decline of 6%. "The past year's challenges in a tightened market have highlighted a greater need for adaptability and resilience," Glints CEO Oswald Yeo said in a statement. VIEW ARTICLE

As the landscape of foreign direct investment (FDI) evolves, it's crucial to stay informed about the latest trends. In 2023, significant shifts were observed, with projects becoming increasingly capital-intensive. Here's an exclusive look by FDI Intelligence at the noteworthy FDI projects that made waves last year 🌐 Dominant Sectors: Energy companies, semiconductor manufacturers, and battery firms took center stage, propelling the top 10 largest greenfield FDI projects of 2023. This surge notably contributed to the rise in the average capex level for cross-border FDI projects globally. 📈 Top Four Projects: TSMC in Germany 🇩🇪: Taiwan Semiconductor Manufacturing Company (TSMC) secured a pivotal position with a confirmed final investment decision in Germany, emphasizing the company's global expansion strategy. Equinor in Brazil 🇧🇷: Equinor, a prominent energy company, made significant strides with a confirmed final investment decision in Brazil, marking its strategic involvement in South America's energy landscape. bp in Germany 🇩🇪: The energy giant bp demonstrated its commitment to sustainable projects with a confirmed final investment decision in Germany, aligning with the global focus on green initiatives. Amazon in Malaysia 🇲🇾: E-commerce behemoth Amazon made a substantial move with a confirmed final investment decision in Malaysia, underscoring the country's attractiveness for major players in the digital economy. VIEW ARTICLE

Locations in Asia-Pacific are being increasingly chosen due to dynamic qualitative factors, such as a skilled workforce, rather than static quantitative factors, such as low-cost considerations. Compared to the previous five years (2013-2017), skilled workforce availability has entered the top three most influential factors amongst determinants cited for investment in the Asia-Pacific region during the 2018-2022 period (figure 7). Approximately half of all Greenfield projects within the software and IT services sector cited skilled workforce availability as having prompted the location decision. The figures are 22 per cent for the business services sector, 22 per cent for communications and 17 per cent for the financial services sector. Similarly, technology and innovation as well as the existence of universities and research hubs moved up the ranks, while conversely, lower cost moved from the ninth place down to fifteenth in the 2018-2022 period. This development underscores that the Asia-Pacific region is increasingly chosen due to its (interrelated) talent pool, technology and innovation ecosystems, industry clusters, and services quality. Such a change in investor appreciation also aligns with the observation that the region is attracting increasingly higher value-added business activities. VIEW REPORT

We are thrilled to announce that KW Group, in its prestigious role as the ASEAN Directorship for the State of Missouri, Department of Economic Development, will be participating as part of the US Pavilion at the upcoming Singapore Airshow as well as supporting Select USA activities around the event. 🤝 Let's Connect Over Coffee - Your Gateway to Aerospace Investment Insights! We extend a warm invitation to all industry partners, and trade and investment collaborators to meet with us during the airshow or in Singapore from February 19th to 25th. Drop us a direct message, and we'll be delighted to schedule a coffee meeting to delve into the exciting prospects of aerospace investments in the State of Missouri. ☕ Coffee, Conversations, and Collaborations Await! For government Investment Promotion Agencies and Economic Development Organizations seeking unparalleled opportunities for representation in the thriving ASEAN region, look no further. KW Group is here to facilitate Foreign Direct Investment (FDI) and Export Development. 🔗 Explore Our Credentials 📧 Contact Andrew K for Exclusive Opportunities: 📩 andrewk@kwconfex.com