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