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High FDI potential in Asian markets
Region should move away from Europe-centric views, says expert
February 11, 2014 11:09 by Sidra Tariq
This region should consider shifting some of its focus for foreign direct investment (FDI) from European to Asian markets, said James Wolfensohn, former president of the World Bank Group.
Wolfensohn was addressing the audience at the panel, “Role of government communications and reputation management in attracting FDI,” during the International Government Communication Forum being held at Expo Center Sharjah.
“For my working life, 80 percent of the income was with the Organization for Economic Co-operation and Development (OECD) countries,” he noted. “By 2050, that 80 per cent will be 35 or 40 per cent, because we have China, India [and Asia, in general] emerging. You’ll have [a minimum] of 55 per cent of the income in Asia.”
To realize the opportunities that will arise in the changing world, the region should “reach out not just to established companies in Europe and the United States, but build a capacity to understand Asia as well.”
“I see a complete change in the way our generation worked,” he added. While the current generation will have to adapt to these changes, the younger generation will have to start “speaking in those terms” as well.
The UAE’s Minister of State for Foreign Affairs, Anwar Gargash, agreed that the economic landscape is changing: “From the perspective of the UAE, we are seeing a very different world now. Many of the links that we were perhaps more Euro-centric are becoming more widespread. The challenge for an Arab country like ours is to do two things simultaneously: On the one hand, is to keep an eye on a very difficult region, but not allow that region to consume all of our time. And at the same time, be able to reach out to new areas such as India, China, the Far East and Africa, which are witnessing huge growth. Balancing these two things is not always easy.”
According to Wolfensohn, consistency and coherence in government communications is important to attract and retain foreign investment.
During the panel, the potential of company growth was also highlighted as a determining factor for investors. Felipe Calderon, former president of Mexico, said, “In terms of perception of the businessmen and possible investors, one of the things that really matters is profits. If they are able to see opportunities of profits, they will take it.”
He added that there is often a gap between public perception and reality. Governments should not only focus on communicating the reality, but also strive to address public and investor perception.