Services Liberalization in ASEAN: Foreign Direct Investment in Logistics

The services sector plays an important role in ASEAN economies as it accounts for about half of the regions GDP and more than 45 per cent of its total employment. ASEAN aspires to deepen integration in the services sector in order to enhance the sectors contribution to economic development and growth in each country. Despite this, services liberalization has progressed slowly compared to goods liberalization both at the multilateral and the regional levels. Different regulatory mechanisms across countries have contributed to the slow pace of liberalization.

Logistics is an important industry in the services sector. The integration of logistics is important for deepening economic integration in ASEAN as it facilitates the movement of goods, services and people within and across countries, among producers and from producers to consumers. In view of its importance, ASEAN has identified logistics as one of its priority integration sectors. It has also developed a Connectivity Master Plan and a Strategic Transport Plan, where logistics plays an important role.

Tham Siew Yean is senior fellow at the ISEAS – Yusof Ishak Institute, Singapore.

Sanchita Basu Das is a former fellow at the ISEAS – Yusof Ishak Institute, Singapore.