Pakistan as a destination of foreign direct investment (FDI) in services (intra-Asia) was at number ten and attracted 0.7 billion dollars in 2003-09, declining to 0.3 billion dollars in 2010-15 and further declining to zero in 2016 while rising to 1.3 billion dollars in 2017, according to Asian Economic Integration Report (AEIR) 2018 published by Asian Development Bank.
India in number two position attracted 8 billion dollars of FDI in services (intra-Asia) in 2017 while in 2003-09 it had attracted 2.8 billion dollars while China attracted 8.7 billion dollars in 2017 registering a decline when compared with 16.4 billion dollars in 2003-09.
Pakistan did not feature as one of top ten destinations in total trade in services while China, in first position, witnessed a decline in FDI inflows in services from 44.2 billion dollars in 2003-09 to 35.9 billion dollars in 2017. India retained its second position with 20.4 billion dollars in 2003-09 and witnessed a rise to 29.8 billion dollars in 2017 narrowing the gap with China.
Pakistan was the lowest amongst Central Asia and Regional Economic Cooperation (Carec) countries in terms of trade openness as a percentage of Gross Domestic Product at 24 percent followed by Uzbekistan at 26.5 percent, followed by Turkmenistan at 33.1 percent.
The report further states that Kazakhstan, Singapore, Pakistan, the Philippines, the Republic of Korea, New Zealand, and Georgia all at least doubled 2016 investments from the PRC.
According to the report intraregional migration remains an important part of international migration from the region, with 33.4% of migrants from Asia staying within the region; and 71.3% of all international migrants to Asia originating from within the region. Major host economies for intraregional migration include India (5.0 million); Thailand (3.5 million); Pakistan (3.4 million); Australia (3.2 million); and Hong Kong, China (2.7 million).
Intraregional migrants to India largely come from neighboring countries such as Bangladesh (3.1 million), Pakistan (1.1 million), and Nepal (0.5 million). Further, Thailand hosted migrants from Myanmar (1.8 million), the Lao People's Democratic Republic (0.9 million), and Cambodia (0.7 million); and to Pakistan largely from either India (1.9 million) or Afghanistan (1.5 million).
On the other hand, major sources of intraregional migrants are the PRC (5.2 million), Bangladesh (3.7 million), India (3.3 million), Myanmar (2.4 million), and Indonesia (1.8 million). The proportion of intraregional migration to total outward migration declined over the years-from 47.5% in 1990 to 34.7% in 2017. The absolute number of Asian migrants staying within the region during 2015-2017 also dropped slightly-from 30.24 million to 30.18 million.
Recent trends on the outward migration of workers vary substantially across countries. There have been large increases in Bangladesh, the Philippines, and Viet Nam; while India, Indonesia, Pakistan, Thailand, and Sri Lanka have seen the outflow of workers moderating or declining in recent years. One reason is that several countries actively discourage unskilled workers in vulnerable jobs like manual labor or domestic work.
Also, many source countries have seen sustained growth in job creation. But the rapid expansion in working age population in many of these countries continues to leave substantial workforce supply for overseas jobs. For example, the working age population in Bangladesh and the Philippines has grown more than 7.7% over the past 5 years.
Bangladesh, Pakistan, and Sri Lanka relied on remittances for at least proportional to an annual average of 5.0% of GDP since 2010; this has been the trend for these South Asian economies. In Southeast Asia, remittance inflow to the Philippines was equivalent to 10.5% of GDP; in Viet Nam, it was 6.3%. In per capita terms, remittances to Tonga, the Marshall Islands, and Armenia are significant. In the Pacific, remittances not only contribute to output and growth, but also promote financial development.
The report states that regional cooperation is increasingly necessary to tackle a rising number of cross-border challenges in Asia and the Pacific, including infrastructure gaps, trade connectivity, financial contagion, and climate and disaster-resilience.
The AEIR says collective action to build regional public goods brings greater benefits than if countries work alone to address issues that also affects their neighbors. Regional public goods are goods, services, and systems of policies or rules that have shared benefits across countries, such as cross-border infrastructure, communicable disease control, and disaster risk management.
"Enhanced regional cooperation and coordination can help countries manage regional issues, particularly if they complement national and global actions," said ADB Chief Economist Yasuyuki Sawada. "Multilateral development banks can help increase regional public goods by reducing knowledge and financing gaps as well as promoting regular policy dialogue for long-term cooperation among countries."
Asia's intraregional trade-measured by value-rose to 57.8% of its total global trade in 2017 from 57.2% in 2016. The recovery in regional trade can be attributed to the expansion of global value chains after a slowdown since 2012. Intraregional foreign direct investment also increased slightly to $260.0 billion in 2017 from $254.7 billion in 2016.
Growing trade and investment linkages in Asia and the Pacific can be a buffer for the region against uncertainties in the global economy, the report says. However, it warns that uncertainty about trade policy could dampen the recovery in regional and global trade and damage consumer sentiment and business confidence in capital spending and investment.
The report notes that regional integration in Asia and the Pacific, as measured by ADB's Asia-Pacific Regional Cooperation and Integration Index, or ARCII, increased modestly from 0.525 in 2015 to 0.530 in 2016, with a positive impact on economic growth and poverty reduction. The index incorporates six sub-indexes that measure trade and investment, money and finance, the regional value chain, infrastructure and connectivity, movement of people, and institutional and social integration.
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