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