Introduction

The inaugural issue of The Mekong Region: An Economic Overview was published in 2004 and included analysis of external debt sustainability in the less developed countries of the Greater Mekong subregion (GMS) (ADB 2004). The 2005 issue dealt with economic impacts of infrastructure projects in the GMS (ADB 2005). In this third issue, we look at the trends, patterns, and economic impacts of foreign direct investment (FDI) as well as implications for policies to promote FDI and enhance its benefits.

The remainder of this report is organized in three parts:

• First, we provide a brief overview of the recent economic performance in the GMS economies. We review trends in gross domestic product (GDP) growth, inflation, fiscal and monetary variables, intra-regional trade, and external balance of payments accounts.
• The second part discusses in detail the trends and patterns of foreign direct investment in the sub-region, especially in Cambodia, Lao PDR, and Viet Nam (CLV), where the literature on this topic is sparse. It looks at the policies implemented to foster FDI and the impact of FDI on the economies' growth, employment and productivity.
• The final part of the report provides a summary of the main points, including policy implications for the transition economies in the Mekong as they attempt to attract FDI and take full advantage of the benefits that it has to offer.

Comment(s)

There are [1] comment(s) for this entry. Post a comment.

1. Hong, Sung Ho
   (posted 05 November 2006 / 07:05:25 PM)
   
   I think that the country needs to be in the position where they can control the FDI, in other words, they have to attract the foreign countries' investors in many area of industries.
   
   Having a FDI on what the investors think they can have most profit. It may not be the same industry that the country who is getting a FDI wants to improve on.
   
   In the long run, in order to trigger the spillover or synergy effect, the country needs to have a specific and long term economic growth plan so that they know what industry needs FDI. I think that a country that is getting a FDI needs to diversify to attract foreign investors and more importantly they (government) needs to have a long term economic plans.