Simon Montlake reports from Kuala Lumpur on a revitalised economy now under the low-key yet decisive auspices of the newly elected Abdullah Badawi.

In 2003, the US led the way in terms of both providing and benefiting from FDI while China and India were strong runners-up as recipients, according to the latest figures from IBM-PLI’s Global Investment Location Database. In Europe, the UK is still number one, Russia is improving and the Czech Republic did well in terms of jobs. In 2004, strong economic growth is expected in Asia and cost-conscious multinationals will be shifting to new locations in Asia, South America and Africa. Site selection will continue to be influenced by security considerations, as was the case in 2003.

Related charts can be found in the downloadable file below.

Pelepas as trans-shipment hub

The free zone of the port of Tanjung Pelepas, Malaysia (Pelepas Free Zone) is destined to become south-east Asia’s leading trans-shipment hub. Situated in the state of Johor, at the southern tip of the Malaysian peninsular, it is located at the intersection of major international shipping routes.

Cairo is due to host an international free zone conference, as announced at the WAIPA executive meeting in Geneva at the end of January. The conference, planned for April 26-27, will be co-hosted by World Free Zone Convention (WFZC) and the General Authority for Investment and Free Zones (GAFI).

The proceedings will be in three languages: English, French and Arabic.

Speaking in Geneva, WFZC chairman Graham Mather said that, with the accession of eastern Mediterranean territories (Cyprus and Malta) to the EU in mid-2004, Egypt will play an important role in the expansion of EU trade to the south east. During the Cairo conference, Mr Mather will report on the recent discussions with negotiators from the WTO and the EU on the future for free zones. He said that the conference would be inaugurated by Dr Etef Abeid, the prime minister of Egypt.

As a result of the Americas Business Forum, which took place in Miami on November 16-21, 2003, business representatives from countries throughout the Americas agreed that special regimes including refunds/drawback, duty deferral and temporary admission can be preserved, such rights being in accordance with legislation and WTO commitments, and that limiting refunds, exemptions or reduction of duties when an imported good is used in the production of an exported good can be applied to FTZs.

Late last year, the International Labour Organisation (ILO) added a new section on export processing zones (EPZs) to its website, which has been painstakingly researched by ILO staff. The site provides probably the most exhaustive listing of the world’s free zones.

Erol Sabanci, chairman of Akbank, tells Stephen Timewell of his optimism on recent sector reforms and the political and economic outlook for Turkey.

The failure of Brandenburg’s chip plant venture was a blow to Germany’s eastern regions. But as Jan Wagner explains, the affair hasn’t dampened the region’s ambitions.

fDi talks to Craig McInnes of Atmel North Tyneside about the US company’s expansion plans in the North of England.

Conventional wisdom says that countries with a poor governance environment lose FDI. However, Shaomin Li’s recent study on the relationship between governance environment and FDI shows that this view is wrong.

What effect does entry mode in China have on investors’ profitability and performance? Martin Scullion and Lorraine Watkins-Mathys investigate.

Juan Orduńa Carrillo explains why agreements by regional groups such as APEC are good news for foreign investors.

Karen E Thuermer reports on the huge potential for Canada in oil production from Alberta’s oil sands – the world’s largest known hydrocarbon source.

With its close proximity to New York City, the Hudson Valley is the ideal place for off-site locations and high-tech back-up centres for financial and insurance firms. Karen E Thuermer reports.

Indiana Governor Joseph E Kernan is working hard to create jobs in the state, he tells Karen E Thuermer.

Governor Joseph E Kernan of the US state of Indiana reckons he is in the fast lane. Perhaps this is in keeping with the state that is home to the famous Indianapolis Motor Speedway. But his mind is not on racing; it is on improving the lives of Hoosiers (as the inhabitants of the state are called).

Hugh O’Shaughnessy talks to Grenada’s Prime Minister, Dr Keith Mitchell, about why the island’s time as an offshore financial services centre was so shortlived.

The proposed FTAA falls far short of ideals, which could hit economic growth, says Jonathan Wheatley.

Regeneration projects have the power to revive and foreign investors play an important part. Charles Piggott reports on how outsiders inspire confidence.

In the first of our Multilateral Action series, Commonwealth Business Council CEO Dr Mohan Kaul describes how the CBC is leading an anti-corruption drive in southern Africa.

Tanzania used to be famous as a bastion of socialism. Now it has gained a reputation for open markets and an investor-friendly government. Brian Caplen met with the prime minister Frederick Tluway Sumaye in December and discussed the changes.

‘We have opened up the economy and liberalised everything and we are more liberal than countries such as South Africa. In Tanzania, you can repatriate your profits and your dividends and there is no exchange control’

Is Russia’s aim of doubling its economy by 2010 through special economic zones realistic? Ben Aris reports.

fDi editor Brian Caplen talks to Michael Garrett about Nestlé’s strategy for China, given predictions of rocketing demand for its products.

Arizona is playing host to a cluster of environmental technology companies, Karen E. Thuermer reports.

It may surprise environmentalists to hear that the US was recently ranked second in the renewable energy stakes. Ashleigh Lezard reports on the initiatives that are attracting investment.

Bernard Hanin, managing director of Wallonia’s Office for Foreign Investors, talks to fDi about the region’s changing role and his optimism for its future.

Albert I, the king behind Wallonia’s canal route between Ličge and Antwerp, might be pleased that his countrymen and women continue to invest in the region’s waterways. But he would be disappointed if he stood on any of the bridges long enough to count the barges passing below. Just four or five boats an hour pass by. Sadly, Wallonia’s waterways, like many in Europe, are idle. However, growing road congestion has made waterways an increasingly attractive option for freight travel.

Eric Lacroix is the Belgian facilities manager for British company Farnell in One, which distributes electronic and industrial components to blue-chip clients from its European base at Bierset near Liege. He was recruited by Forem Logistique as part of a four-person management team charged with getting an Ł8m distribution operation up and running. “Although Farnell could have expanded in Leeds, it wanted to be closer to customers in Europe, particularly France and Germany,” he says.

US air freight carrier TNT has helped to turn Liege Airport into one of the busiest dedicated air freight terminals in Europe. In the next few months, TNT will decide whether to go ahead with a E100m project to expand its freight hub at Liege. Meanwhile express delivery and logistics company DHL is rumoured to be considering Liege alongside two other regional airports to become its new European air-freight hub instead of Brussels.

The region of Wallonia is Belgium’s fastest growing logistics centre, attracting flagship foreign investors with its fiscal incentives, transport infrastructure and readily available supply of land and labour. Charles Piggott reports.

South Korea’s investment promotion agency, previously called the Korea Investment Centre, has been renamed Invest Korea and has developed a new mandate to attract more FDI to the country. In charge of the mandate is Alan Timblick, an Englishman who has been living and working in Korea for more than 30 years.

“Trade and Investment” has been cited as one of the dealbreakers of the WTO Ministerial Conference in Cancún in September 2003. While officials and lobbyists discuss investment’s future place in the Doha Round of multilateral trade negotiations, there are some significant tools in existing WTO rules, most notably in the General Agreement on Trade in Services (GATS), which investors can use for market access and protection. The same applies to similar rules in regional and bilateral trade agreements.

Biotechnology company ProImmune, based in the UK city of Oxford, has won the UK-to-US side of the ‘Touchdown’ Transatlantic Business Plan Competition. The US-to-UK side was won by 4FrontSecurity of Reston, Virginia.

A report by Christian Aid has called for mandatory laws to make multi-national companies (MNCs) meet social and environmental standards.

Last November, China’s tech and telecoms giant TCL acquired the TV and DVD operations of Thomson, the French consumer electronics group, thus becoming associated with the brand names Thomson in Europe and RCA in the US. And SABMiller, a South African brewery with its primary listing in the UK, has emerged as one of the world’s biggest, controlling around 160 plants in more than 40 countries.

Brazilian president Luiz Inácio Lula da Silva has emerged from a high-level meeting in Geneva with 200 potential investors in buoyant mood. When asked by a journalist how many deals he had signed, he replied: “Listen, if it was as easy as holding a meeting with investors and going away with several deals, I would be holding investor meetings from morning to night and Brazil would have more investment than any other country.”

African bureaucracies are “ignorant, parasitic, out of this world, irrelevant, anachronistic,” according to Uganda’s President Yoweri Museveni. He was responding to figures given at the 10th general conference of the United Nations Industrial Development Organization (Unido) on the length of time it takes to get FDI approvals in Africa compared with other parts of the world.

fDi goes into 2004 with a continuing commitment to bringing you top-level interviews and insights into what is happening in the FDI arena.

fDi magazine is now in its third year of publication. From a brave start when FDI flows were in a downturn, the magazine has grown beyond our wildest expectations. fDi is now essential reading for senior company executives, politicians and IPA heads, largely thanks to the high level interviews and exclusive news stories our journalists obtain.