Foreign direct investment has been an important parameter in accelerating the process of growth and development in the South East Asian economies since the last two decades. Since the 1990s, it is certain that South Asia has become an important destination for investment with their liberalized approach to FDI and constant changes in improving the FDI policy framework. Though FDI flows in ASEAN declined by 8 per cent to $120 billion in 2015, ASEAN remained a major destination of FDI flows among developing economies, receiving some 16 per cent of global FDI flows to such economies. The overall investment environment in the region improved further with the launch of the ASEAN Economic Community (AEC) in December 2015 and the introduction, including announcements of FDI favourable national policy measures in 2014–2016. (ASEAN FDI data base). However ASEAN Member States (AMS) today are at vastly different stages of development but all sharing immense growth potential. As in many other areas, there are strong divergences in the quality of investment climates among AMS. These challenges are well understood within the region. This article looks at these issues from the perspective of a comparative investment climate among the member economies and to find out ways for greater convergence of both policies and outcomes within this region.
