Vriens & Partners Asia Pacific Investment Climate Index 2014

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In this year’s Asia Pacific Investment Climate Index, Indonesia tumbled to fifteenth due to the enactment of several protectionist regulations. In contrast, improvements in rule of law, openness to international trade & business, and political stability boosted Vietnam to thirteenth. Singapore retained the top spot while New Zealand unseated Hong Kong for second place. As a group, the Southeast Asian economies are attracting record levels of FDI as the region increasingly opens to foreign investment ahead of the implementation of the ASEAN Economic Community (AEC) by 2015.

Overall, the relative consistency in the rankings from 2013 to 2014 reveals that high profile political events have not significantly altered the climate for foreign investment in the short term. Gains in openness to international trade & business, fiscal & monetary administration, and rule of law have largely offset losses in political stability in some markets. These gains in openness are largely driven by greater economic integration through participation in bilateral and multilateral trade and investment agreements.

index 2014 ranking

The Asia Pacific Investment Climate Index is the only publication that examines the relationship between political and economic governance and foreign direct investment across the region. The Index evaluates and ranks 20 Asia Pacific countries according to six criteria: Rule of Law, Openness to International Trade & Business, Taxation, Corruption, Political Stability, and Fiscal & Monetary Administration.

As investor interest in the Asia Pacific soars, the Asia Pacific Investment Climate Index serves as a reference to help readers understand and evaluate the region’s political and economic dynamics. Aside from aiding international investors in their decision making, the data from this index can help policymakers identify areas for improvement to increase the competiveness of their countries and attract higher quality foreign investment to catalyse development and transform their economies.