asean business outlook survey 2014 results

7/30/2019 ASEAN Business Outlook Survey 2014 Results

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ASEAN Business Outlook Survey2014

IN COOPERATION WITH:


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1ASEAN Business Outlook Survey

2014


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ThemostattractivecountriesfornewbusinessexpansionareIndonesia,followedbyVietnam,

ThailandandMyanmar.

Respondents generally expect their businesses to expand in their response location and

increasetheirworkforcein2013.

Some business leaders show interest in diversifying their investments from China into the

ASEANregionoverthenexttwoyears,butthemajoritydonot.

Interestin Myanmar continues togrowas morecompaniesareeitherexportingor investing

there,orareplanningtodoso.

ThemajorityofcompaniesarenotfacingsignicantnancingconstraintsorhigherborrowingcostsintheASEANregion.

WhilebusinessexecutivesviewASEANintegrationasimportantfortheircompanies,manyare

doubtfulthattheASEANEconomicCommunity(AEC)willachieveitsstatedgoalsby2015.Of

those,mostrespondentsbelievethattheAECsgoalswillnotberealizeduntil2020orlater.

Nearly half ofthereportingmanufacturing companies utilizethe provisions ofASEANs free

tradeagreementstoexportfromtheregiontoAustralia,NewZealand,China,India,Japanand

SouthKorea.Fewerservicescompaniesreportutilizingtheagreements.Regardlessofsector,

mostviewtheseagreementsasopportunitiesratherthanthreats.

Many respondents are unsure of the potential impact of the two major regional free tradeagreementscurrentlybeingnegotiatedtheTrans-PacicPartnership(TPP)andtheRegional

ComprehensiveEconomicPartnership(RCEP).However,ofthetwo,morerespondentsbelieve

thattheTPPwillhaveanimpactontheircompaniesfutureinvestmentsintheregion.

DespitegeneraloptimismaboutASEANsbusinessprospects,signicantchallengesremain.

Corruptionisthegreatestconcernandbarriertotradeandinvestment,followedbyinfrastructure,

lawsandregulations,anddifcultymovingproductsthroughcustoms.Conversely,personal

securityandsentimenttowardtheU.S.arethegreateststrengthsoftheregion.

Asinpreviousyears,respondentsinSingaporereportsatisfactionwithmorebusinessfactors

thanrespondentsfromanyoftheothercountriesintheregion.

From 2008 to 2013, the Philippines showed the greatest improvement in its business

environment.

OnlyrespondentsinSingaporearesatisedwithallofthegovernmentagenciescoveredbythe

survey.

EXECUTIVESUMMARY

CONTENTS03 Preface04 EconomicOutlook 38 LaosSummaryReport06 BusinessExpansioninASEAN 40 MalaysiaSummaryReport11 ASEANIntegration&RegionalAgreements 42 MyanmarSummaryReport

22 WorkforceExpansion 44 PhilippinesSummaryReport23 ExpatriateSatisfaction 46 SingaporeSummaryReport24 InternationalSchools 48 ThailandSummaryReport26 CurrentLocalBusinessEnvironment 50 VietnamSummaryReport28 ChangeinSatisfactionofLocalBusiness Environment(2008vs.2013)30 BruneiSummaryReport 52 ProleofRespondents32 CambodiaSummaryReport 53 SurveyMethodology

34 IndonesiaSummaryReport36 LaosSummaryReport38 MalaysiaSummaryReport40 MyanmarSummaryReport

42 PhilippinesSummaryReport44 SingaporeSummaryReport46 ThailandSummaryReport48 VietnamSummaryReport50 ProleofRespondents51 SurveyMethodology52 Acknowledgments


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2014

Overthepastdecade,theASEAN Business Outlook Surveyhasbeenthekeybarometerof

U.S.businesssentimentinSoutheastAsia.BusinessleadersfrombothAmericanandforeign

enterprises depend on the surveys timely and reliable business insights. Similarly, thought

leaders from governments, academia, and non-governmental organizations across ASEAN

continuetorelyonthesurveytobetterunderstandtheopportunitiesandchallengesthatexistforAmericanbusinessesacrosstheregion.

2013marksthetwelfthyearoftheASEAN Business Outlook Surveybutitisthersttimethat

thesurveyincludesresponsesfromAmericanbusinessrepresentativesinall10ASEANmember

countries,addingBrunei,Laos,andMyanmartothisyearsedition.TheAmericanChamber

of Commerce in Singapore (AmCham Singapore) and the U.S. Chamber of Commerce, in

cooperationwith AmChams throughout theASEANregion, surveyed 475business leaders

fromU.S.companiesontheirinvestmentplans,outlookfortheregion,andperceptionsof

someofthekeychallengesandopportunitiesinthe10ASEANcountries.

This report presents feedback received from senior members of: AmCham Singapore, The

American Cambodian Business Council, The American ChamberofCommercein Indonesia,

The American Malaysian Chamber of Commerce, The American Chamber of Commerce of

thePhilippines, TheAmericanChamber of Commercein Thailand, TheAmericanChamber

ofCommerceinVietnam(HoChiMinhCity),AmericanbusinessleadersinBrunei,Laos,and

Myanmar,andtheU.S.ChamberofCommerce.

Weencourageyoutodigdeepintothereport,butwewouldliketohighlightafewareasthat

weareespeciallyproudofinthisyearsedition.

First, the Current Local Business Environment red and green heat map on page 26

representstheheartofthereportinmanyways.Ataglance,thischartshowssatisfaction

levelsforsixteendifferentfactorsacrossall10ASEANcountriesandtheregion.

Second,theredandgreenheatmaponpage28introducesdynamismtothisdataforthe

rst time. This chart indicates thepercentage changein satisfaction acrossthesesame

sixteenfactorsfrom2008to2013,illustratingthedirectionthateachfactorisheadingby

country.

Third,wehavedoubledthecontentfortheindividualcountrypagesinthelatterhalfofthe

report to deepen your understanding of American business leaders sentiments towardthosecountries.

WebelievethatthisyearsASEAN Business Outlook Surveyisourbestyetandweencourage

youtousethesurveytodeepenyourunderstandingofoneoftheworldsmostvibrantand

growingregions.

Sincerely,

PREFACE

TamiOverbyVice President, Asia

U.S. Chamber of Commerce

GregTirrellActing Executive Director

AmCham Singapore


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ECONOMICOUTLOOK

IMPORTANCE OF ASEAN MARKETS

63%ofrespondentsreportthatoverthepasttwoyears,ASEANmarketshavegrown

asaportionoftheircompaniesworldwiderevenues.33%reportthatASEANmarkets

importancehasheldsteadyoverthepasttwoyears.

Further,themajorityofrespondents(73%)saythatASEANmarketswillbecomemore

importanttotheircompaniesworldwiderevenuesoverthenexttwoyears.

More important Less important Have the same

importance

Dont know

ImportanceofASEANMarketsinTermsofWorldwideRevenues,

overthePast2Years

63% 3% 33% 1%

More important Less important Have the same

importance

Dont know

ImportanceofASEANMarketsinTermsofWorldwideRevenues,

overtheNext2Years

73% 2% 24% 1%


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PROFIT OUTLOOK

Compared with 2012, business executives are optimistic about their prot outlook

inASEAN for the restof 2013 and are even more positive about 2014,with84% of

executivesexpectinganincreaseinprots.RespondentsinMyanmarleadthewayby

sharingnearlyunanimousoptimismfortheirprotoutlookin2013and2014.

Businessexecutiveshighlighteconomicrecovery(57%)andlimitedgrowthopportunities

in other regions (55%) as the top reasons ASEAN markets will continue to grow in

importanceforworldwideoperationsandrevenuesoverthenexttwoyears.

TopReason sASEANMarketsWillBeMoreImportantfor

WorldwideOperationsandRevenuesovertheNext2Years

57%

55%

48%

39%

28%

Economic recovery

Limited growth opportunities in other regions

Improvement in infrastructure

Change in business strategy

Stable political conditions

2013 Increase 2014 Increase

ASEANProtOutlookin2013&2014,Comparedto2012

Brunei Cambodia Indonesia Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam

66% 69% 64% 64%

37%50%

59%

78% 78%

84% 84% 85% 85%

73% 73%

62%

89%

75%

95% 93%100%

82%

Regional


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Yes No

IsImportingGoodsintoYourResponseLocationaSignicantProblemforYourCompany?

Regional Brunei Cambodia Indonesia Laos Malaysia Myanmar Philippines Singapore Thailand Vietnam

20% 27%

80% 73%

20%

80%

49%64%

2%21%

51%36%

98% 79%

38%

62%

100%

26%

74%

22%

78%

Most Signifcant Barriers to Conducting Business within ASEAN

When asked to describe the most signicant barrier to conducting business within

ASEAN, an overwhelming number of respondentsanswered corruption. Respondents

alsoemphasizedalackofconsistencyandtransparencyinbothgovernmentalagencies

andregulationsacrosstheregion,withaparticularemphasisoncustomsagencies.

Inadditiontothefactorslistedabove,somerespondentslistlackofuniformregulations

across ASEAN, language differences, currency depreciation and imperfect market

informationasotherissuesthatdiscouragetheircompaniesfromconductingbusiness

withinASEAN.

IsASEANIntegrationImportanttoHelpingYourCompanyDoBusinessintheRegion?


77%

64%

6%

78% 78%

22% 22%

36%

70%

83%

30%

17%

65%

82%

94%

82%

35%

23%

86%

14%

18% 18%

Yes No

IMPORTANCE OF ASEAN INTEGRATION

Mostrespondents(77%)saythatASEANintegrationisimportantinhelpingtheircompanies

dobusinessintheregion.ThisisparticularlysoinLaos,where94%ofrespondentsassert

thatASEANintegrationishelpingtheircompaniesdobusinessintheregion.

ASEANINTEGRATIONANDREGIONALAGREEMENTS


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Not sureYes No

WilltheTPPImpactWhereYourCompanyPlansFutureInvestmentsintheRegion?

Thai land VietnamRegional Brunei Cambodia Indonesia Laos Malaysia Myanmar Philippines Singapore

36%

29%

35%

37%

36%

20%

50%

30%

31%

26%

43%

25%

25%

50%

41%

25%

34%

29%

43%

28%

44%

18%

38%

32%

29%

39%

30%

39%

31%

17%

55%

28%

27%

Companies across the region have mixed views on whether the TPP will impact futureinvestmentplanning,with36%reportingthatitwill.Respondentsfromthefourparticipating

ASEANcountrieswereslightlymorecertainthattheTPPwillimpacttheirplanning,with40%

respondingYes,comparedtoonly31%ofrespondentsfromtheothersixASEANcountries.

WhatAspectsoftheTPPareImportanttoYourCompany?

45%

Regulatory coherence

Intellectual property protection and enforcement

Trade facilitation and logistics/supply chain

Enforceable investment rules and protection

Level playing eld with state-owned enterprises

67%

61%

53%

52%

Increased Investment in ASEAN

The TPP would strengthen the growth potential in the region, improving the risk

appetite o our bank or the region.

Vietnam Becomes a More Attractive Location for Expansion

We would invest more production capacity in Vietnam as opposed

to other locations.

Increased Ease of Doing Business

The agreement would allow easier expansion and structural alignment.

IP protection is key or our business.

Selected Insights rom Survey Respondents


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Global Leaders inOffice Leasing and

Investment Transactions

Cushman & Wakefield advises landlords and tenants

on all aspects of real estate, from leasing and project

management to investment and valuation.

www.cushmanwakefield.com


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Current Business Climate:

86%ofrespondentsarenotfacingsignicant

nancingconstraintsin2013.

The majority of respondents (88%) are not

facinghighercostsofborrowingin2013.

Importance o ASEAN Markets:

78% of respondents report that ASEAN

marketshaveincreasedinimportancetotheir

companiesoverthepasttwoyears.

The majority of respondents (82%) expect

ASEANs importance to their companies to

continuetoincreaseoverthenexttwoyears.

82%regardASEANintegrationasimportant

tohelpingtheircompaniesdobusinessinthe

region.

Level o Trade and Investment in ASEAN:

86% of respondents indicate that their

companies level of trade and investment

in ASEAN has increased over the past two

years.

90% expect their companies level of trade

and investment in ASEAN to continue

increasingoverthenextveyears.

Business Expansion:

65% of respondents expect their workforce

toincreaseinIndonesiain2013.

The most targeted countries for expansion

areMyanmar,Thailand,andVietnam.

Proft Outlook in Indonesia:

69%expectprotstoincreasein2013.


INDONESIA

TopTargetCountriesforBusinessExpansion

Myanmar Thailand Vietnam Malaysia Philippines

39% 39% 39%

33%

22%

Proft Outlook 2013

Proft Outlook 2014

2%

4%

25%

2%2%

18%

78%

69%

PercentageofRespondentsFacingSignicant

FinancingConstraints(2009-2013)

2010 2011 2012 20132009

55%

29%22%

13% 14%

Increase Remain Steady Decrease Not sure



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Expatriate Satisaction:

84% of respondents assert that expatriate

employees are generally satised with their

assignmentsinIndonesia.

Themajorityofrespondents(74%)reportthatexpatriateemployeesattempttoextendtheir

timeinIndonesia.

Regional Responsibility:

37%ofrespondentsareresponsibleformore

thanonecountry.

Primary Business Activities:

35% of respondents in Indonesia represent

theservicessector.Thetopsubdivisionsintheservices industry are healthcare, accounting

services,andconsulting.

41%representthemanufacturingsector.The

topsubdivisionsinthemanufacturingsector

areconsumergoods,machinery&equipment,

andoil&petrochemical.

Regional Responsibility

Multiple Countries Only One Country

63%

37%

Company Expansion Plans

Expand Remain about the same

16%

84%

WhichASEANCountryHoldstheNextLargest

TurnoverforYourCompany?

18%

16%

14%

12%

Thailand

Singapore

Malaysia

Vietnam

Satised Dissatised

None Customs(57%)

Immigration(43%)

Taxat ion/Revenue

(40%)

SatisfactionwithGovernmentAgencies

Major Strengths

(% Satised)

Major Concerns

(% Dissatised)Availabi lityoflow

costlabor(53%)

Corruption(80%)

Sentimenttowards

theU.S.(53%)Laws&Regulations

(65%)

Infrastructure(65%)

Newbusiness

incentivesofferedby

government(47%)

Easeofmovingyour

productsthrough

customs(45%)


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94% of executives report that expatriate


assignmentsinMalaysia.

Themajorityofrespondents(81%)assertthatexpatriateemployeesattempttoextendtheir

timeinMalaysia.



thanonecountry.

Primary Business Activities:

34%ofrespondentsinMalaysiarepresentthe

services sector. The top subdivisions in theservices industry are consulting, healthcare,

andeducation.

31%representthemanufacturingsector.The

topsubdivisionsinthemanufacturingsector

areelectronicsandconsumergoods.



31%

69%


Expand Remain about the same

19%

6%

75%



31%

22%

13%

6%

Singapore

Thailand

Indonesia

Philippines

Contract

Satised Dissatised

Immigration(59%) None

Taxation/Revenue

(52%)


Major Strengths

(% Satised)

Major Concerns

(% Dissatised)Infrastructure(84%) Corruption(53%)

Easeofmoving

yourproducts

throughcustoms

(56%)

Taxstructure(41%)

Ofceleasecosts

(53%)

Sentimenttowards

theU.S.(53%)


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region.





years.




Business Expansion:


toincreaseinthePhilippinesin2013.


areIndonesiaandThailand.

Proft Outlook in the Philippines:



PHILIPPINES


Indonesia Thailand Vietnam Malaysia Myanmar

33%

28%

26%

23%

18%

Proft Outlook 2013

Proft Outlook 2014

21%

3%

15%

5%

8%

84%

64%

Increase Remain Steady Decrease




2010 2011 2012 20132009

39%

10%

26%

18%21%


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assignmentsinthePhilippines.

Themajorityofrespondents(82%)assertthatexpatriateemployeesattempttoextendtheir

timeinthePhilippines.


The majority of surveyed business leaders

(61%)arenotresponsibleformorethanone

country.

Government Agencies

Thepluralityofrespondentsareneithersatisednor dissatised with the following agencies:

agency to promote/develop investment and

immigration.



39%

61%


82%

15%

3%



23%

15%

13%

5%

Singapore

Thailand

Indonesia

Malaysia

Satised Dissatised

CentralBank(67%) Customs(53%)

MinistryofFinance

(50%)

Taxat ion/Revenue

(49%)


Major Strengths

(% Satised)

Major Concerns

(% Dissatised)

Availabi lityof

trainedpersonnel

(87%)

Corruption(59%)

Sentimenttowards

theU.S.(79%)Taxstructure(56%)

Availabilityoflow

costlabor(74%)

Infrastructure(54%)

Stablegovernment

&politicalsystem

(62%)

Laws&Regulations

(46%)

Housingcosts

(56%)

Easeofmovingyour

productsthrough

customs(44%)

Personalsecurity

(56%)

Ofceleasecosts

(51%)

Expand Remain about the same Dont know


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A signicant majority of respondents (86%)

are not facing higher costs of borrowing in

2013.








78% regardASEANintegration asimportant


region.





years.


and investment in ASEAN to continueincreasingoverthenextveyears.

Business Expansion:


toincreaseinSingaporein2013.


areIndonesiaandVietnam.

Proft Outlook in Singapore:



SINGAPORE


Indonesia Vietnam Thailand Malaysia Philippines

65%

53%

49%

43%

37%

Proft Outlook 2013

Proft Outlook 2014

29%

1%

5%

2%

3%

11%

85%

64%





2010 2011 2012 20132009

37%

24%

14%17%

10%


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96%

4%


61%

37%

2%



21%

20%

19%

7%

Thailand

Indonesia

Malaysia

Vietnam

Expand Remain about the same Contract




assignmentsinSingapore.

Themajorityofrespondents(83%)reportthatexpatriateemployeesattempttoextendtheir

timeinSingapore.



thanonecountry.

Government Agencies

Respondents inSingaporeare satisedwith

allincludedgovernmentagenciesthataffecttheirbusinessesinSingapore.

Satised Dissatised

Taxation/Revenue

(78%)

None

Customs(75%)

AgencytoPromote/

DevelopInvestment

(74%)

MinistryofFinance

(69%)

Immigration(68%)

CentralBank(67%)


Major Strengths

(% Satised)

Major Concerns

(% Dissatised)

Personalsecurity(93%) Housingcosts(71%)

Stablegovernment&

politicalsystem(90%)Ofceleasecosts

(54%)

Infrastructure(89%) Availabilityoflowcost

labor(48%)

LackofCorruption

(87%)

Laws&Regulations

(84%)

Taxstructure(84%)

Sentimenttowardsthe

U.S.(73%)

Freemovementof

goodswithinthe

region(66%)

Newbusinessincentivesofferedby

government(65%)

Easeofmovingyour

productsthrough

customs(64%)


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region.





years.




Business Expansion:


toincreaseinThailandin2013.37%expect

theirworkforcetoremainthesamein2013.


areIndonesiaandMyanmar.

Proft Outlook in Thailand:



THAILAND


Indonesia Myanmar Thailand Vietnam Cambodia

50%

47% 47%

37%30%

Proft Outlook 2013

Proft Outlook 2014

25%

1%

2%

10%

89%

73%





2010 2011 2012 20132009

48%

27%21%

16%

11%


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56%

44%


75%

23%

2%



14%

13%

12%

11%

Indonesia

Philippines

Singapore

Malaysia

Expand Remain about the same Contract




assignmentsinThailand.

The majority of executives(79%) report thattheirexpatriateemployeesattempttoextend

theirtimeinThailand.


Themajorityofsurveyedbusinessleadersin

Thailand(56%)areresponsibleformorethan

onecountry.

Government Agencies

The plurality of respondents are neithersatised nor dissatised with the following

agencies: agency to promote/develop

investment, immigration, taxation/revenue,

thecentralbankandministryofnance.

Satised Dissatised

None Customs(47%)


Major Strengths

(% Satised)

Major Concerns

(% Dissatised)Personalsecurity

(75%)

Corruption(71%)

Sentimenttowards

theU.S.(64%)Laws&Regulations

(42%)

Infrastructure(56%) Availabilityoftrained

personnel(42%)

Housingcosts

(52%)

Ofceleasecosts(51%)


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Percentage of ASEAN Turnover Represented in Response Location

Less than 5% 21% 46% 35% 16% 37% 3% 50% 26% 20% 13% 25%

5% -


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asean business outlook survey 2014 results

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