ABSTRACT
Foreign direct investment (FDI) has played an integral part in Southeast Asia’s contemporary economic development experience. The industrialisation of many of the region’s states has depended to a significant degree on the investment of foreign multinational enterprises (MNEs) in their economies. This especially applied to the original core five members of the Association of Southeast Asian Nations (ASEAN) – Indonesia, Malaysia, Philippines, Singapore and Thailand – that have pursued an increasingly outward-oriented economic development strategy based on export- and FDI-led growth. These twin processes have been prime drivers behind Southeast Asia’s impressive techno-industrial transformation over recent decades, which, according to Chia (1999), allowed the region’s constituent economies to ‘overcome the constraints of small domestic markets and narrow resource bases; exploit comparative advantage and scale economies; access foreign capital, technology and marketing and managerial expertise’ (p. 249). Chia further observed that Southeast Asia’s success in attracting FDI could be generally attributed to a combination of political, economic and social factors, including the supportive developmental policies of the region’s governments, favourable macroeconomic conditions and factor endowments (especially labour and natural resources), and rapidly expanding domestic markets.
