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GMS Officials Sets The Way Forward for Investment Cooperation (February 2001)

The Third Meeting of the Subregional Investment Working Group (SIWG-3) was held in Ho Chi Minh City, Viet Nam on 27-28 February 2001 to discuss progress in investment cooperation among the GMS countries. Among SIWG's priority activities, the GMS Business Forum has been successfully launched in October 2000, thus, providing the mechanism for the private business sector to participate fully in the GMS process. Steps to enhance the capacity of investment promotion agencies in the GMS were also discussed, with the ADB and UNIDO agreeing to collaborate on a technical assistance project for capacity building in the GMS countries. The Meeting also discussed activities for improving the information architecture for investment promotion in the GMS, noting that the ASEAN Secretariat is already doing a lot of work in the area. ADB indicated that it will consider the possibility of providing assistance to Cambodia, Lao PDR, Myanmar and Viet Nam for setting up their investment promotion websites.

Country presentation on recent trends and developments in investment policies indicated continuing efforts on the part of the GMS countries to improve their investment incentives and regulatory schemes. Good governance, facilitation of investment approvals, and improvements in the legal framework are the key focus of enhancement measures in the GMS countries. International organizations who were present in the Meeting also discussed the issue of the role of investment incentives as a determinant of foreign direct investments (FDI). Based on their work in the GMS, the Foreign Investment Advisory Service (FIAS) concluded that investment incentives is only one determinant of FDI; others that are more significant are macroeconomic stability, market size, input availability and cost, and infrastructure adequacy. The ASEAN Secretariat, presented a contrary view, indicating that there is a strong empirical evidence to show that while incentives are not the main reason for locating FDI, it remains relevant in encouraging FDI flows.

The highlights of the pre-investment study on the East West Economic Corridor (EWEC) was also presented to the participants, with a panel of private sector representatives providing their views on investment opportunities in the EWEC.

The SIWG-3 Meeting was attended by GMS public sector officials, private sector representatives, representatives from international development agencies, and other observers. The Meeting was co-organized by the Ministry of Planning and Investment of Viet Nam, who also sponsored a field trip to Tan Thuan Industrial Park.

For the entire proceedings, email: gms@adb.org

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