Understanding Financial Flows to Agriculture

Toward inclusive and responsible investments in the ASEAN region

Financial Flow in Agriculture
Paper author: 
Ward Warmerdam, Jeroen Walstra, Léa Pham Van and Mara Werkman
Paper publication date: 
Monday, December 14, 2020

The increasing integration of ASEAN markets, as envisioned by the ASEAN Economic Community (AEC), has opened new opportunities for investment and trade in the region. ASEAN’s combined GDP of US$ 2.6 trillion is the third largest economy in Asia and the seventh largest in the world in 2014, which attracted US$ 136 billion in foreign direct investments in the same year. These and a combined population of 622 million, which represents the third largest market in the world, are the foundations of the ASEAN’s ambition of realizing a fully integrated region in the global economy by 2025.

ASEAN has become a magnet for investments and, as a result, regional policy frameworks have been developed to set investment standards for the region, namely, the “ASEAN Guidelines for Responsible Investments in Food, Agriculture and Forestry” that was adopted in 2018 and the “Guidelines for the Promotion of Inclusive Business in the ASEAN” that was endorsed by the ASEAN Economic Ministers in 2020. As the ASEAN concludes the mid-term review of its AEC Blueprint 2025, it will be imperative to dive deeper in understanding investment flows in the region and its implications toward formulating appropriate policy recommendations for the consideration of the ASEAN.

The study looked at financial flows for agribusiness within and into the 10 ASEAN countries: Brunei Darussalam, Cambodia, Laos, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. It aims to identify investment trends, challenges, and opportunities in all ASEAN countries to understand the emerging investment regime on agribusiness in the region, analyze its implications, and propose recommendations for the review and updating of the ASEAN Comprehensive Investment Agreement (ACIA) that provides a policy framework for the ASEAN’s investment environment.