Table 1. Singapore OFDI stock, by geographical distribution, 1981 2003

In 2002, services accounted for about 55 per cent of the total stock of inward FDI in developing countries and some 85 per cent of outward FDI stock for developing countries.

Its OFDI stock reached 29 billion in 2004 and accounted for 67 per cent of the region's OFDI stock (see table 1).

Figure 1. Developing economies OFDI stock by region, 1980 2004

Table 1 (Cont'd). Singapore OFDI stock, 1981 2003

Table 2. Singapore OFDI stock, by industry and activity abroad, 1990, 1995, 2000, 2002, 1990 2002

Figure 1. Singapore OFDI stock, by geographical distribution and industry,

Investments in services are growing OFDI in computer related industries, information technology and trading activities accounted for the lion's share of Chinese OFDI stock in 2003.

Obstacles to OFDI

Oceania received 20 per cent and Europe 16 per cent of Singapore OFDI stock in 2002.

Drivers and motivation of OFDI

Does OFDI increase competitiveness of firms and how could competitiveness from OFDI be measured?

Policy measures that support OFDI 13

OFDI and enterprise competitiveness

) To the extent that these agreements protect investment and open up industries for FDI, they facilitate OFDI from developing countries.

FDI by SMEs involved evaluation of investment locations based on a set of variables which could be clustered under markets, costs, natural resources, infrastructure framework, policy framework and business promotion and support factors.

Some experts stressed that policies had been traditionally oriented to attract FDI and were not really defined as promoting outward FDI.

Recent trends in OFDI from developing countries

Much of African OFDI takes place in neighbouring countries.

OFDI from Singapore Trends and development

Drivers and motivations of Singapore OFDI

Promoting OFDI Key laws and regulations

One is that Governments have been supporting FDI outflows.

The Department of Statistics (1991) estimates that OFDI stock from Singapore at the end of 1976 was S 1 billion.

OFDI from the BRIC countries Brazil, Russia, India and China is now growing rapidly and looks set to dominate OFDI activity from developing countries in the future (Sauvant 2005).

OFDI and enterprise competitiveness 11

Developed countries remain the main source of outward FDI, while developing countries' share has also grown (from one per cent in 1990 to 10 per cent of global outward FDI services stock in 2002).

Internationalization of Developing Country Enterprises

There is notable OFDI from Argentina.

How can OFDI benefit economic development? How does OFDI affect enterprise competitiveness, and how can it be measured?

OFDI from Singapore Trends and development 4

Impact of OFDI on competitiveness of Singaporean enterprises 14

On the inward side, developing countries' FDI has been increasing (to 25 per cent of inward FDI stock in services), though developed countries remain the main recipients.

Impact of OFDI on competitiveness of Singapore enterprises

African OFDI is mainly from South Africa. SMEs from Uganda are investing abroad, facilitated by a joint venture arrangement with TNCs, in response to competition and to strengthen trade channels.

Meanwhile, outward foreign direct investment yields 20 annually, on average.

With outward FDI stock of 859 billion in 2003, transnational corporations from developing countries are becoming significant international players.

Following is a discussion of the main OFDI trends and players.

Third, the Singapore Government plays a significant role in promoting OFDI.

Foreign direct investment

Conclusion 18

To describe the nature and trends of OFDI by indigenous Singaporean enterprises

To examine key laws and regulations that enhance Singapore's OFDI.

These institutional frameworks are perhaps more effective in supporting OFDI than are OFDI incentives per se.

More importantly, developing country (home) governments can enhance the ability and capacity of their countries' enterprises, particularly SMEs, to internationalize through OFDI.