The role of FDI in promoting cross border linkages in the Greater Mekong Subregion
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The role of FDI in promoting cross border linkages in the Greater Mekong Subregion

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The role of FDI in promoting cross border linkages in the Greater Mekong Subregion Presentation Transcript

  • 1. ROLE OF FDI IN BUILDING CROSS BORDER LINKAGES IN GMS Smriti Sharma UNESCAP June 3 – August 23, 2013
  • 2. THE GREATER MEKONG SUBREGION • Cambodia • Lao PDR • Myanmar • Thailand • Viet Nam
  • 3. GARMENTS & TEXTILE: A GVC APPROACH
  • 4. GLOBAL VALUE CHAIN The value chain describes the full range of activities that firms and workers perform to bring a product from its conception to end use and beyond. R&D RAW MATERIAL COMPONENT NETWORK PRODUCTION NETWORK EXPORT MARKETING
  • 5. FOREIGN DIRECT INVESTMENT • A long term investment by a non-resident entity • Exerts substantial management control • By either setting up a subsidiary company, acquiring shares (usually 10% or more as specified by OECD) or through the formation of a joint venture or undergoing a merger. (www.investopedia.com)
  • 6. METHODOLOGY • 2 databases  World Investment Report, 2013 (UNCTAD)  fDi Markets • Period under study (2003-12) • FDI– Mergers & Acquisitions (Purchase/sale of existing equity) & Greenfield Investments (New investments)
  • 7. FDI INFLOWS - ASEAN
  • 8. FDI INFLOWS - GMS
  • 9. SOURCE COUNTRIES OF GFDI IN GMS
  • 10. ROLE OF INTRA-ASEAN GFDI
  • 11. FDI INFLOW COMPARISON WITHIN GMS
  • 12. GFDI IN GMS (MANUFACTURING VS. TEXTILES) JOBS CREATED – 927,094
  • 13. GFDI IN CAMBODIA (MANUFACTURING VS. TEXTILES) JOBS CREATED – 17,701
  • 14. GFDI IN LAO PDR (MANUFACTURING VS. TEXTILES) JOBS CREATED – 13, 247
  • 15. GFDI IN THAILAND (MANUFACTURING VS. TEXTILES) JOBS CREATED – 302, 288
  • 16. GFDI IN MYANMAR (MANUFACTURING VS. TEXTILES) JOBS CREATED – 10, 338
  • 17. OWNERSHIP STRUCTURE VIET NAM
  • 18. GFDI IN VIET NAM (MANUFACTURING VS. TEXTILES) JOBS CREATED – 583, 520
  • 19. POLICY RECOMMENDATIONS • Garment and Textiles – High employment generating sector • FDI will add to the capital of the countries • Required for investment, new technology, research and best practices • Supportive policies required – reduce regulation, bureaucracy, improve absorptive capacity • Border Area Promotion – Complementary Factor Endowment • Reduce Service Link Costs