Increased FDI flows can be achieved through a number of different approaches. One such approach is outsourcing: the contracting out by a firm of certain business functions, previously undertaken in-house, to an external provider. AADCP II will support efforts to increase outsourcing activities within ASEAN Member States. This project will consist of two components: 1) a comprehensive analytical study on manufacturing outsourcing opportunities in ASEAN with an aim to enhance understanding of outsourcing in general and outsourcing opportunities in ASEAN production networks; and 2) an initial promotional program.
The first component included analysis of the theoretical basis of outsourcing as an economic activity and its impact on economies, an assessment of the current outsourcing situation in ASEAN Member States, and identification of factors that affect an outsourcing decision and influence the success of outsourcing activities. While the study assess outsourcing in all ASEAN Member States, it pays particular attention to the CLMV countries (Cambodia, Lao PDR, Myanmar and Viet Nam) as part of ASEAN’s overall focus on narrowing the development gap. The study produced practical policy recommendations at both regional and national levels for the endorsement of the ASEAN sectoral bodies.
The second component focused on the development of a long-term program to promote outsourcing opportunities in ASEAN based on the results of the analytical study. This included development of a long-term strategy and work program for facilitating and promoting outsourcing opportunities, identification of essential activities to promote outsourcing and implementation of initial, selected activities.
This project links to a number of other completed AADCP II-supported projects in the investment sector: 1) Enhancing Implementation of ASEAN Agreements; 2) Investment Trends and Prospects in ASEAN, 3) Best Practices for Investment Promotion and Facilitation; and 4) Promoting the ASEAN Comprehensive Investment Agreement.
The Regional Report on Outsourcing Opportunities in ASEAN has been completed in 2015, and a policy paper based on the report was produced in 2016. To access the full report, please contact the Services and Investment Division of the ASEAN Secretariat.