Effects of Foreign Direct Investment Inflows on Food Security in ASEAN Countries

+

Effects of Foreign Direct Investment Inflows on Food Security in ASEAN CountriesLinhan Huang

+Food Security

Food is the most basic human needs Human rights Social and political stability Poverty reduction

Hunger and undernourishment are major obstacles to economic development

The State of Food Insecurity in the World (Food and Agricultural Organization(FAO), 2014)

+What is Food Security?

“…when all people at all times have access to sufficient, safe, nutritious food to maintain a healthy and active life”

– World Food Summit, 1996

+Foreign Direct Investment

Developed Countries

Developing

CountriesFDI

Capital, technologies, human capital, etc.

+Foreign Direct Investment

$778 Billion

54% of Global FDI Inflows

+FDI and Food Security

Modernization Theory FDI Economic Growth of all groups Improved Food Security

Dependency Theory FDI Inequality Worse Food Insecurity

+ASEAN—Association of Southeast Asia Nations Indonesia, Malaysia, Philippines, Singapore, Thailand,

Brunei Darussalam, Viet Nam, Lao PDR, Myanmar and Cambodia

+FDI and Food Security in ASEAN

+FDI Inflows in ASEAN

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

FDI Inflows in ASEAN

Year

2005

US

$ in

Bill

ions

+FDI Inflows in ASEAN

Brunei

Darussa

lam

Cambo

dia

Indon

esia

Lao P

DR

Malaysi

a

Myanm

ar

Philip

pine

Singa

pore

Thaila

nd

Vietna

m02468

1012141618

0.72 0.292.48

0.07

4.64

0.31 1.23

16.33

4.552.61

Mean FDI Inflows in ASEAN (1989-2011)

2005

US

$ in

Bill

ions

+Food Security in ASEAN

Prevalence of Undernourishment Energy supply (kcal/capita/day)Food Protein supply (grams/capita/day) Nutrition

+Food Security in ASEAN

World

Developing Countries

Asia

Southeast Asia

Cambodia

Indonesia

Lao,PDR

Philippines

Thailand

Viet Nam

0 5 10 15 20 25 30 35 40 45 5018.6

23.223.7

29.639.9

19.944.6

24.243.8

46.9

12.514.9

13.910.9

17.18.6

27.817

7.39

Undernourishment Trends 1990-92 vs. 2010-12 (FAO, 2013)

2010-121990-92

Prevalence of Undernourishment (%)

+Do FDI inflows exert any positive influence on food security in ASEAN countries?

+Equation

+Models

+Results

+Prevalence of Undernourishment

$10 Billion FDI Inflows 5.8 Percentage Points 30 Million People

+Daily per Capita Energy Supply$10 Billion FDI Inflows

+Daily per Capita Protein Supply12%

$10 Billion FDI Inflows

Daily protein needed by children between 4-8 years old (Institute of Medicine, 2005)

+Political Stability

+Conclusion

FDI Inflows help improve food security in ASEAN countries.

+ReferencesAsian Development Bank. (2012). Food security and poverty in Asia and the Pacific: key challenges and policy issues . Retrieved from http://www.adb.org/sites/default/files/publication/29724/food-security-poverty.pdf Balasubramanyam, V.N., Salisu, M. & Sapsford, D. (1999). Foreign direct investment as an engine of growth. The Journal of International Trade & Economic Development, 8, 27-40. Retrieved from http://web.a.ebscohost.com.ezproxy.lib.purdue.edu/ehost/pdfviewer/pdfviewer?sid=d4ebfd47-ded7-44ac-a654-e92a0d1c2584%40sessionmgr4005&vid=1&hid=4206 Basu, P. & Guarigalia, A. (2007). Foreign direct investment, inequality and growth. Journal of Macroeconomics, 29, 824-839. doi: 10.1016/j.jmacro. 2006.02.004 Food and Agricultural Organization (FAO). (1996). Rome declaration on world food security. Retrieved from http://www.fao.org/docrep/003/w3613e/w3613e00.htm Food and Agricultural Organization. (2013). FAO statistical year book 2013. Retrieved from http://www.fao.org/docrep/018/i3107e/i3107e00.htm Gollin, D., Parente, S.L & Rogerson, R. (2006) The food problem and the evolution of international income levels. Journal of Monetary Economics, 54, 1230-1255. doi: 10.1016/j.jmoneco.2006.04.002 Institute of Medicine. (2005) Dietary reference intakes for energy, carbohydrate, fiber, fat, fatty acids, cholesterol, protein, and Amino Acids (Macronutrients). Washington, CD: The National Academies Press. Jenkins, J. C. & Scanlan, S. (2001) Food security in less developed countries, 1970 to 1990. American Sociological Review, 66,718-744. Retrieved from http://www.jstor.org.ezproxy.lib.purdue.edu/stable/10.2307/3088955?origin=crossref& Makki, S. S., & Somwaru, A. (2004). Impact of foreign direct investment and trade on economic growth: evidence from developing countries. American Journal of Agricultural Economics, 86(3), 795-801. Mihalache-O’Keef, A. & Li, Q. (2011). Modernization vs. dependency revisited: Effects of foreign direct investment on food security in less developed countries. International Studies Quarterly, 55, 71-93. doi: 10.1111/j.1468-2478.2010.00636.x World Health Organization. (n.d. ). Food security. Retrieved from http://www.who.int/trade/glossary/story028/en/ United Nations Conference on Trade and Development. (n.d.) Inward and outward foreign direct investment flows, annual, 1970-2013 [Data file] Retrieved from http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=88United Nations United Conference on Trade and Development. (n.d.) GDP by type of expenditure and Value Added by kind of economic activity, annual, 1970-2012 [Data file]. Retrieved from http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx?ReportId=95 World Bank. (2006). Repositioning nutrition as central to development: A strategy for large-scale action. Why invest in nutrition? Retrieved from http://siteresources.worldbank.org/NUTRITION/Resources/281846-1131636806329/NutritionStrategyCh1.pdf World Bank. (n.d.) Food production index (2004-2006=100) [Data file]. Retrieved from http://databank.worldbank.org/data/views/reports/tableview.aspx World Bank. (n.d.) Prevalence of Undernourishment (% of population) [Data file]. Retrieved from http://databank.worldbank.org/data/views/reports/tableview.aspx 

+Thank You

+Foreign Direct Investment

“Foreign direct investment are the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments.” (World Bank)

+FDI Inflows in ASEAN

+Food Security in ASEAN

+Prevalence of Undernourishment

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.0037.07%

14.72%

Prevalence of Undernourishment (%) in ASEAN (1991-2011)

Year

Prev

alen

ce o

f U

nder

nour

ishm

ent

(%)

+

Political StabilityIn Myanmar, since the outbreak of internal violence in 2012, 140,000 people remain internally displaced and need food assistance.

World Food Programme (2014) . Retrieved from https://www.wfp.org/sites/default/files/imagecache/600x400/WFP_MYA_2014_Ayuka%20(113).jpeg