ASEAN Investment Report 2019 FDI in Services: Focus on Health Care The Association of Southeast Asian Nations (ASEAN) was established on 8 August 1967. The Member States of the Association are Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Viet Nam. The ASEAN Secretariat is based in Jakarta, Indonesia. For inquiries, contact: The ASEAN Secretariat Community Relations Division (CRD) 70A Jalan Sisingamangaraja Jakarta 12110 Indonesia Phone : (62 21) 724-3372, 726-2991 Fax : (62 21) 739-8234, 724-3504 E-mail : [email protected] Catalogue-in-Publication Data ASEAN Investment Report 2019 – FDI in Services: Focus on Health Care Jakarta: ASEAN Secretariat, October 2019 332.67395 1. ASEAN – Investment 2. Foreign Direct Investment – Services – Health Care ISBN 978-602-5798-45-0 ASEAN: A Community of Opportunities for All The text of this publication may be freely quoted or reprinted, provided proper acknowledgement is given and a copy containing the reprinted material is sent to the Community Relations Division (CRD) of the ASEAN Secretariat, Jakarta. General information on ASEAN appears online at the ASEAN Website: www.asean.org Copyright Association of Southeast Asian Nations (ASEAN) 2019. All rights reserved. This publication was prepared by the ASEAN Secretariat and the United Nations Conference on Trade and Development (UNCTAD), and supported by the Government of Australia through the ASEAN-Australia Development Cooperation Program Phase II (AADCP II). The map in this publication is only indicative and is not drawn to scale. Disclaimer The ASEAN Investment Report is produced to facilitate a better understanding of FDI developments in ASEAN. The findings, interpretations, and analysis in the Report should be treated with care, as work on harmonising and improving FDI quality across the region is on-going. The ASEAN Secretariat and UNCTAD have taken due diligence in the preparation of this publication. However, it shall not be held liable for any omissions or inaccuracies in the content of this publication. Neither the ASEAN Secretariat, UNCTAD and the Government of Australia accepts any liability for any claims, loss or expenses that may arise or arising from use of information in this publication. Reliance on the information is at the user’s sole risk/responsibility. FOREWORD v Foreign Direct Investment (FDI) inflows into ASEAN increased for the third consecutive year in 2018, reaching an all-time high level of US$ 155 billion. The region’s share of global FDI inows also rose to 11.5 per cent in 2018. This trend is expected to continue, taking into account the dynamic industrial developments and improvement of investment and business environment in the region. FOREWORD Services sector is the largest recipient of FDI in ASEAN. The share of services sector in total FDI grew from 50 per cent in 1999–2003 to 66 per cent in 2014–2018, Foreign Direct Investment (FDI) inflows into ASEAN increased for the third consecutive year in in li2018,ne w itreachingh globa anl a all-timeverage high. A levelsign ioffica US$nt 155part billion. of FD TheI in region’s services share flo wofs global into fFDIinan inflowscial servalsoices rose, who to les11.5ale per an centd re tina i2018.l, and Thisrea ltrend esta tise expectedactivities to. continue, taking into account the dynamic industrial developments and improvement of investment and business environment in the region.This yea r’s ASEAN Investment Report features the FDI in the services sector, with a special focus on health care. The Report looks into foreign investments and the Services sector is the largest recipient of FDI in ASEAN. The share of services sector in total FDI Multigrew-Na fromtiona 50l En perte rprcentis eins 1999–2003 (MNEs) in toth e66 hea perl tcenthca rein 2014–2018,industry in ASin lineEA N,with a sglobal well aaverage.s the inveAst significantment en vpartiron ofm eFDInt inth eservicesy thrive flows in. AS intoE AfinancialN is do services,ing mu cwholesaleh to stre nandgth enretail, re gandion areall heaestatelth ca activities.re provis ion. Work on improving market opening and investment regime in health care is progressing, along with the implementation of other related sectoral agreThisem year’sents a ASEANnd stra tInvestmentegic action Report plans. features the FDI in the services sector, with a special focus on health care. The Report looks into foreign investments and the Multi-National Enter- prises (MNEs) in the healthcare industry in ASEAN, as well as the investment environment they thriveIt in.is ASEANworth no is tidoingng th muchat the to dstrengthenemand fo regionalr health health care care ser vprovision.ices in ASE WorkA Non and improving the corrmarketespon openingding nee andd f investmentor investm regimeent in inth healthis sect careor a isre progressing, expected talongo incre withas thee r apimplemenidly in - the tationcom ofin otherg yea relatedrs. T sectoralhis de agreementsmand is anddriv strategicen by actionpopu laplans.tion growth, changing demographics, universal health care programmes and rise in the incidence of non- It is worth noting that the demand for health care services in ASEAN and the corresponding comneedmun forica investmentble diseas ine s.this T hsectorerefo raree, pexpectedolicies ttoo sincreaseupport rapidlythe de inve thelop mcomingent o fyears. priva Thiste heademandlth care aisre driven nece sbysa rpopulationy to comp legrowth,ment p ubchanginglic hea ltdemographics,h care spend inuniversalg in ord ehealthr to keep care up wprogrammesith the dem andand rise. in the incidence of non-communicable diseases. Therefore, policies to support the development of private health care are necessary to complement public health careT spendinghe Repo inrt order pro vtoid keepes rec up owithmm theen dademand.tions in moving forward to develop a comThepe titiReportve hea provideslth ca rerecommendations environment in in tmovinghe reg forwardion. We to h developope tha at competitivepolicy mak healthers an cared stakenvironmenteholders in in t hthee iregion.ndustr yWe w ihopell find that the policy Rep omakersrt usef andul. stakeholders in the industry will find the Report useful. Dato Lim Jock Hoi DASeTOcr etLIMary- GeJOCKneral oHOIf ASEA N Secretary-General of ASEAN vii ACKNOWLEDGEMENTS The ASEAN Investment Report 2019 (AIR 2019) was prepared under a technical cooperation agreement between the ASEAN Secretariat and the UNCTAD Division on Investment and Enterprise (DIAE). The report was prepared and written by Wee Kee Hwee and Amelia Santos Paulino with contributions from Karim Kirollos, Shin Ohinata, Maria Cecilia Salta and Siew Yean Tham. It was overseen by Aladdin Rillo, Deputy Secretary-General of ASEAN for ASEAN Economic Community, ASEAN Secretariat, and James Zhan, Director, DIAE, UNCTAD, with technical supervision from Richard Bolwijn, Head, Investment Trends and Issues Branch, DIAE, UNCTAD. The Report benefited from support and contributions provided by the teams at the Services and Investment Division, ASEAN Secretariat, led by Tan Tai Hiong and supported by Madelyn Joy Almazora. At various stages of preparation, specific inputs were received from Hideki Fujie, Nurul Imlati, Christopher H. Lim, Vincent Mack, Hwy-Chang Moon, Henrick Z. Tsjeng, Audrey Ne Win and Wenyan Yin. The report benefited from the discussion and papers presented by experts at the Consultative Forum on Investment in the Health Care Industry in ASEAN, 20–21 June 2019, Bangkok, Thailand. These experts were Angelita F. Arcellana, Liza Dharnee Baskaran, Fabian Bigar, Kok Ewe Chan, Somkiet Chuapetcharasopon, Chintan Desai, Aik Meng Eng, Leguet Fabrice, Brian Foo, Siu Loon Hoe, Kimcheng Hok, Ee Fai Kam, Sumalee Kristarnin, Busakorn Lerswatanasivalee, Lionel Yong Seng Lim, Michael Lints, Eric Loh, Kyaw Swar Lwin, Saur Maruli, Abrar Mir, Adulyapichet Paranee, Pongpat Patanavanich, Eric Peh, Chalermpon Punnotok, Marini Binti Md. Saari, Tanita Sirisup, Cole Sirucek, N. Sivamohan, Nanthanontry Southanou, Bussarakum Sriratana, Samuel Tan, Mervin Teo, Jeff Williams and Thin Zar Win. The report received support from and involved interviews with the following officials and corporate executives: Florentino T. Afable, Pilar Nenuca P. Almira, Madhurima Dutta, Diane Esguerra-Equipaje, Hector G. Gayares, Jr., Malen M. Gellido, Hedy Hadiyani, Sharon C. Hernandez, Tracy Jin, Mun Pew Khong, Penelope Mei Yen Koh, Nicole Lee, Andres M. Licaros, Jr., Anna Rose R. Malapad, Denise Nah, Augusto P. Palisoc, Jr., Elmer San Pascual, Mary Grace C. Perez, Arif Patrick Rachmat, Stephen Z. Satyahadi, Eunice Hui Woon Seow, Ferry A. Soetikno, Tiffany Robyn Soetikno, Han Chuan Tan, Kelyn Siang Wei Tan, Jin Chiang Toh, Deepali Vichare, Vidjongtius, Bernadus Karmin Winata, Shirley Wong and Christina Wu. Comments at different stages in the preparation of the report were provided by members of the ASEAN Coordinating Committee on Investment. The report has also benefited from the contribution of Preqin and the work of the ASEAN Working Group on International Investment Statistics. Statistical assistance was provided by Sri Wardhani Bakri and Anang Laksono. Elisabeth Anodeau-Mareschal, Catherine Frances Corpuz, Hilvy Hanriany, Isya Kresnadi, Sovyana Putranti, Ratih Ramelan and Katia Vieu provided administrative and other support. The manuscript was copy-edited by Lise Lingo. Pablo Cortizo designed the charts; he and Laurence Duchemin typeset the report. Research assistance was provided by Jing Li and Tanawan Pang Yew Wee. Cooperation Program Phase II