Development, Urbanization, Migration, and Quality of Life - Dragons and Tigers: A Geography of South, East and Southeast Asia - page 95

Acquring Development Funds

Thailand, for example, encourages investment in areas
remote from Bangkok. Moreover, Asia is no longer sim-
ply a cheap production realm; it is the fastest-growing
consumer market in the world. Thus, there is a changing
emphasis from fleeting use of a low-cost labor force to
long-term commitment, including transfer of knowl-
edge, skills, and technology .
Multinationals are powerful entities of global propor-
tions, yet they generate paradoxical impacts. While provid-
ing employment and raising levels of disposable income,
localization of production, and management, creation of
subsidiaries, and linkages with established firms simulta-
neously strengthen their complex webs of influence.

FOREIGN DIRECT INVESTMENT (FDI)
Foreign Direct Investment (FDI) in Asia has increased
with quantum leaps. Investment strategies are founded
both in the needs of the investor and in the economic
and political climate of the recipient country . Change in
one area propels change in another. For example, India
saw its foreign investment soar after its economic re-
forms in 1991. Huge investments in China by Japan, the
Association of Southeast Asian Nations (ASEAN) coun-
tries, the United States, and the European Union, have
been stimulated by the revision of China' s tax code and
its reassessment of incentives for foreign investment.
Developed countries are attracted by China' s low
wages and enormous market potential. In 2007, East
Asia received one-third of all FDI inflows to developing
regions. However, 80 percent of this went to China alone.
While FDI decreased with the economic crisis of 2007
(see the discussion below), investments in India and
China rose again in 2008.
Any sign of instability can induce investors to retreat.
War and political chaos have kept many away from Myan-
mar, Laos, and Cambodia. Vietnam' s mercurial invest-
ment policies and disregard for venture profitability have
turned off many potential investors. Indonesia' s 1994
deregulation improved the investment environment for
small and medium-sized enterprises, and FDI rose signif-
icantly . However, political crises in 1997 and 1998 saw
dramatic pullbacks. Nuclear testing by India and Pakistan
in 1998 reverberated across the investment world. Cur-
rent political and religious upheavals in Pakistan are caus-
ing investors to question their current and future
financial involvement there. On the other hand, India
now looks promising in terms of foreign investment.
Financial crises in Japan, Thailand, and elsewhere
in Asia at the end of the twentieth century had far-
reaching ramifications. Reductions in FDI were coun-
tered by mergers and acquisitions, with a gain in assets
owned by foreigners. Still, the presence of a cheap labor
force near Singapore keeps Malaysia attractive for invest-
menin the electronics industry . And, with its skilled
work force, an improved infrastructure around Manila,
and a new government committed to economic liberal-
ization, the Philippines has also become a positive FDI
environment.
FDI can bring benefits and spatial transformation.
Governments can use incentives to generate investment
in less-developed, peripheral regions away from the core.

Smoking Asia

The World Health Organization estimates that the
twenty-first century will initiate 10 million tobacco-
related deaths a year with more than two-thirds in
developing countries. Developing countries already
accounted for three-quarters of global tobacco pro-
duction by 1980, and will consume 70 percent of
the world' s cigarettes by 2020. T Tobacco use and pro-
duction has declined in the industrialized world.
However, exports have risen by 250 percent, and
Asia has become a prime marketing target. Around
700 million, mostly men, light up every day . The
habit is thought to kill 2.3 million Asians a year.
There are 120 million smokers in India. There
you can buy 10 small cigarettes known as bidis for
US$.05. One in five men is expected to die from
smoking.
China now houses 25 percent of the world' s
smokers. Although male smoking has gone down
a bit, more affluent young women are taking up
“fashionable” smoking. Cigarettes are employed
to ease social interaction. One is not supposed to
refuse the offer of a smoke. A favor asked might
include the offer of a cigarette. The person who
accepts the cigarette (under pressure) is expected
to carry out the favor.
Government actions are contradictory . Thailand
banned smoking in all public buildings in 2003
and is considering banning it in all places of
entertainment. At the same time, it is building a
giant cigarette factory for its tobacco firm. China' s
government says that smoking is bad and that