The Changing Face Of FDI

1. As recent history has consistently demonstrated, there is nothing more certain than uncertainty. A pandemic, geopolitical tensions, trade frictions and even armed conflict have complicated the landscape for global foreign direct investment, leaving business leaders with no clear signals as they set priorities and make critical investment decisions outside their borders.

2. Adding urgency to the matter, there are now signs of a revival in FDI after a couple of years of decline. But the picture that is beginning to sort itself out is distinctly different from the past. Manufacturing shows promising signs of recovery while nearshoring and friendshoring in new markets are becoming stronger trends.

3. At an estimated $1.37 trillion, global FDI flows grew by a modest 3% year-on-year in 2023, according to preliminary figures from the United Nations Conference on Trade and Development (UNCTAD). But the top-line numbers obfuscate an enormously mixed picture beneath the surface.

4. Most strikingly, once a few European conduit economies are removed from the equation, global flows declined by some 18%. In the European Union, for instance, FDI jumped from negative $150 billion in 2022 to positive $141 billion in 2023, according to UNCTAD, but largely on the back of significant swings in Luxembourg and the Netherlands. Excluding these two countries, inflows to the rest of the EU fell 23%. North America saw zero growth, while other countries saw declines. Flows fell by 9% in developing countries to $841 billion.

Malaysia's industrial output up 5pct in June

1. Industrial output rose 5.0% compared to the same month of the previous year in June, which followed May’s 2.4% increase. The notable pickup was partly driven by faster growth in manufacturing output. In addition, mining and quarrying output rebounded.

2. As a result, the trend improved sizably, with the annual average growth of industrial production coming in at 2.0%, up from May’s 1.4% reading.

3. On a monthly basis, industrial output increased 0.7% in seasonally adjusted terms in June, which was below May’s 1.7% expansion.

Unveiling the SEA Green Economy Index: Tracking Decarbonization Progress in Southeast Asia

1. To better help Southeast Asian markets track their decarbonization progress, the report unveiled the region’s first SEA Green Economy Index which examines how each country is progressing across five metrics with varying weightage totaling 100% – ambition (20%), progress (25%), roadmap (20%), accelerator (25%), and investment (10%).

2. “The index helps provide an objective snapshot of how each country is performing year-on-year and relative to peers. It shows an overview of areas they are doing well and recognizes where progress is being made. It is important to note that this index is constantly evolving as the region continues to tweak initiatives to fit respective markets’ needs,” said Hardcastle.

3. The index shows that Southeast Asia has made some encouraging moves to reduce greenhouse gas emissions, with Singapore and Vietnam making the most progress over the last year. Eight out of 10 countries have net zero targets, and while they have remained the same as the previous year, more than half of the region’s top emitting corporates have set net zero or emission reduction targets, 15 more compared to 2023. In addition, seven countries have shown progress in adopting renewable energy and electric vehicles, preserving forestland, and enhancing health of cropland soil.

4. Translating ambition to action and results will take time. Southeast Asia is still in early adoption and has the opportunity to capture proven and the most cost effective decarbonization initiatives. In 2024, the region needs to double down on the top 13 investable ideas, leverage on the key accelerators to unlock these ideas and ensure better cooperation among governments, corporates, and investors.

"Optimizing Universal Access and Service (UAS) Projects: Strategic Disbursement, Grant Management, and Effective Monitoring"

1. Effective disbursement strategies are crucial for the success of Universal Access and Service (UAS) projects, ensuring that funds are allocated efficiently to bridge connectivity gaps. 

2. The International Telecommunication Union (ITU) outlines various methods for making and managing disbursements & monitoring in UAS initiatives.