Download 29. International finance

Statistical Yearbook for Asia and the Pacific 2014
29. International finance
Foreign direct investment and remittances into the region are on the rise; but aid
has declined. External debt is moderate, except in some countries.
Foreign direct investment (FDI) to the region
has remained large and robust. Inflows of FDI
to the Asia-Pacific region increased slightly in
2013 to around $545.1 billion from around
$511.5 billion in 2012. All subregions received
more FDI, except the Pacific subregion where
FDI declined from $61 billion in 2012 to $53.5
billion in 2013. Among the Asia-Pacific
subregions, East and North-East Asia
continues to attract the largest amount of FDI
inflows, followed by South-East Asia. The
Pacific island developing economies attract less
than 1% of the region’s FDI inflows.
FDI flows within Asia and the Pacific are on
the rise. ASEAN countries and China are
especially attractive destinations for East and
North-East Asian investors, who account for
the largest share of intraregional investments in
the Asia-Pacific region. FDI inflows to ASEAN
countries from other Asia-Pacific countries
remained stable at $56 billion in 2013.1
Australia, China, India, the Republic of Korea,
Japan and New Zealand had combined FDI
flows of $217 billion in 2013, accounting for
15% of global FDI inflows in 2013.
Asia and the Pacific remains the highest
remittance-receiving region in the world, both
in absolute and relative terms. By 2013,
remittances to developing countries in Asia and
the Pacific had increased from $49 billion in
2000 to $265 billion.2 Many countries in Central
Asia are highly dependent on remittances as
indicated by the percentage of their GDP —
Armenia (21.3%), Kyrgyzstan (31.4%),
Tajikistan (47.5%) and Georgia (11.2%). In the
Pacific subregion, remittances account for
around 20% of GDP in Samoa. In South Asia,
Nepal has the highest dependence on
remittances (over 26% of GDP), followed by
Bangladesh (11% of GDP) and Sri Lanka (10%
of GDP). The Philippines is the only country in
South-East Asia with a high dependence on
remittances (9.8% of GDP).
Official development assistance (ODA) or aid
flows to the region has declined from around
$32 billion in 2011 to $30 billion in 2012 — a
drop of 6%. Most Pacific island countries
(Kiribati, Marshall Islands, Federated States of
Micronesia, Solomon Islands and Tuvalu) and
Afghanistan
remain
high-aid-dependent
countries in the region, with aid exceeding 30%
of GDP in 2012 — for Tuvalu the figure stood
at 61.5%.
External debt remained high in many countries
in the region. External debt to GDP ratios in
2012 were 147.5% in Papua New Guinea,
93.1% in Kyrgyzstan, 84.8% in Georgia, 76.5%
in Armenia, 70.0% in Lao People’s Democratic
Republic, 67.6% in Kazakhstan, 62.1% in
Samoa, 49.5% in Mongolia, 49.1% in Vanuatu,
47.8% in Tajikistan and 40.7% in Cambodia.

The Asia-Pacific region remains an attractive destination for FDI. But among the subregions,
the Pacific is the least favoured and East and North-East Asia the most favoured destinations.

The Asia-Pacific region remains the highest remittance-receiving region in the world, both in
absolute and relative terms; but it accounts for less than 1% of the region’s GDP, compared
with over 3% for Africa.

Aid flows have been highly volatile — the East and North-East Asia subregion experiencing a
decline of over 122% in 2011 and 251% in 2012.

In many countries external debt exceeds 40% of GDP — a threshold level that the
International Monetary Fund generally regards as risky; debt servicing in many countries in the
region accounts for over 10% of their income from exports. 1 2
1
United Nations, Economic and Social Commission for Asia and the Pacific, Economic and Social Survey of Asia and the Pacific
2014 (Bangkok, 2014), p. 22.
2
Ibid, p. 23
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