ASEAN INVESTMENT AREA (AIA) : HARMONISATION AND IMPACT

Abstract

The objective of this Academic Exercise is to investigate the impact of ASEAN Investment Area (AIA) on ASEAN and its member countries, and the harmonisation of ASEAN member countries' FDI policies for AIA. Accordingly, in Chapter 1, I will give an overview on how AIA is conceptualised and what it aims to achieve. For the formation of AIA, one of the tasks is to harmonise ASEAN member countries' FDI policies. In Chapter 2, I will introduce a Bilateral and Multilateral Indices of Similarly that measure the level of convergence of FDI policies for a group of countries. Using this index, I will measure the convergence level of FDI policies for ASEAN member countries. The index would indicate to us how far ASEAN member countries have to go to harmonise their FDI policies. Overtime, an increase in this index would represent convergence of FDI policies. In Chapter 3, we will basically examine the impact of AIA. We will look at the possible gains from AIA for ASEAN and its member countries. We will also look at the changing comparative advantage of ASEAN member countries by examine their revealed comparative advantage (RCA). In the light of comparative advantage, we will assess how AIA will determine the future trend of FDI inflows for ASEAN. In Chapter 4, the conclusion, we will summarises the findings. We will also discuss some possible problems facing AIA and conclude whether AIA is the right path for ASEAN to take.