U. S. Busi­nesses Ex­press Cau­tious Op­ti­mism for Con­tin­ued Busi­ness Ex­pan­sion in ASEAN and Thai­land

Thai-American Business (T-AB) Magazine - - Contents -

U. S. com­pa­nies re­main gen­er­ally op­ti­mistic about busi­ness prospects in the As­so­ci­a­tion of South­east Asian Na­tions ( ASEAN), ac­cord­ing to the an­nual ASEAN Busi­ness Out­look Sur­vey, re­leased by the U. S. Cham­ber of Commerce and the Amer­i­can Cham­bers of Commerce in ASEAN mem­ber coun­tries.

In a poll of 471 se­nior ex­ec­u­tives rep­re­sent­ing U. S. com­pa­nies in all ten ASEAN coun­tries, 72 per­cent re­ported that their com­pany’s level of trade and in­vest­ment in ASEAN has in­creased over the past two years, and an over­whelm­ing 86 per­cent of re­spon­dents ex­pect it to in­crease over the next five years.

De­spite the high de­gree of in­vestor con­fi­dence, there has been a down­turn in the level of op­ti­mism over the past few years. Over half ( 53 per­cent) of re­spon­dents said that ASEAN mar­kets have be­come more im­por­tant in terms of their com­pa­nies’ world­wide rev­enues over the past two years, but this is ten per­cent­age points lower than re­ported two years ear­lier.

In ad­di­tion, two- thirds ( 66 per­cent) of re­spon­dents this year ex­pect ASEAN to be­come more im­por­tant in terms of world­wide rev­enues over the next two years; while still high, this is 7 per­cent­age points lower than two years ear­lier.

In Thai­land, 44 per­cent of re­spon­dents said that ASEAN mar­kets have in­creased in im­por­tance in the past two years and 61per­cent ex­pect this im­por­tance to in­crease in the next two years.

In terms of busi­ness ex­pan­sion, 57 per­cent of the polled ex­ec­u­tives in Thai­land re­ported that their com­pa­nies plan to ex­pand in the coun­try, while half ex­pect their work­force to in­crease in 2016 ( see pages 36- 37).

The down­turn in in­vestor op­ti­mism that was noted across ASEAN has been plagu­ing Thai­land as well. The sur­vey has been track­ing U. S. in­vestor sat­is­fac­tion with 16 as­pects of the busi­ness en­vi­ron­ment from 2006 to 2015 and in the past five years in­vestors’ sat­is­fac­tion with the busi­ness cli­mate in Thai­land has de­creased across 14 out of the 16 in­di­ca­tors, some­times by more than 20 per­cent. In com­par­i­son, in­vestor con­fi­dence has been steadily in­creas­ing in some of Thai­land’s neigh­bor­ing coun­tries, such as Malaysia, Viet­nam and Cam­bo­dia. For ex­am­ple, in­vestor sat­is­fac­tion with new busi­ness in­cen­tives of­fered by the gov­ern­ment has risen by 25 per­cent over the past five years in Malaysia and de­creased by 5 per­cent in Thai­land.

“Th­ese re­sults in­di­cate that com­pet­i­tive­ness is not some­thing you achieve once and enjoy for­ever; re­main­ing com­pet­i­tive is a process that re­quires a firm com­mit­ment and con­tin­u­ous tweak­ing and ad­just­ing of laws and reg­u­la­tions to build and sup­port a fa­vor­able busi­ness en­vi­ron­ment. In or­der to re­main at­trac­tive to in­vestors, Thai­land will have to keep in step with neigh­bor­ing coun­tries as they open their economies and en­tice in­vestors with at­trac­tive in­cen­tives,” says Dar­ren Buck­ley, Pres­i­dent of The Amer­i­can Cham­ber Of Commerce In Thai­land.

U. S. com­pa­nies iden­ti­fied a va­ri­ety of con­cerns and im­ped­i­ments to their growth in the re­gion. As in pre­vi­ous years’ sur­veys, cor­rup­tion was the top is­sue across ASEAN, cited by the ma­jor­ity of re­spon­dents in all coun­tries ex­cept Brunei and Sin­ga­pore.

Amer­i­can com­pa­nies also high­lighted bur­den­some laws and reg­u­la­tions, lack of trans­parency, poor qual­ity of in­fra­struc­ture, and the dif­fi­culty in mov­ing prod­ucts through cus­toms in some coun­tries as ob­sta­cles to greater in­vest­ment. 77 per­cent of re­spon­dents to this year’s sur­vey re­ported that ex­change rate volatil­ity has a “sig­nif­i­cant” or “some­what sig­nif­i­cant” im­pact on their busi­ness oper­a­tions in the re­gion.

In Thai­land, re­spon­dents iden­ti­fied the Cus­toms Ad­min­is­tra­tion as the gov­ern­ment agency that most im­pedes growth, in line with find­ings from pre­vi­ous years.

More­over, the sur­vey found that 63 per­cent of polled ex­ec­u­tives in Thai­land say that the Gov­ern­ment rarely or never con­sid­ers in­put from the pri­vate sec­tor on new laws and reg­u­la­tions ( up from 45 per­cent in last year’s sur­vey).

The com­plete sur­vey is avail­able on AMCHAM Thai­land’s web­site www. am­chamthai­land. com.

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