Indonesia, Vietnam and Thailand Are Most Attractive Countries for New Business Expansion

The most attractive countries for new business expansion are Indonesia, followed by Vietnam, Thailand and Myanmar, finds the 2014 Asean Business Outlook Survey released by the American Chamber of Commerce.


Respondents to the survey generally expect their businesses to expand in their response location and increase their workforce in 2013.


Some business leaders show interest in diversifying their investments from China into the ASEAN region over the next two years, but the majority do not.


The study also highlights that interest in Myanmar continues to grow as more companies are either exporting or investing there, or are planning to do so.


No Significant Financing Constraints

The majority of companies are not facing significant financing constraints or higher borrowing costs in the ASEAN region.


While business executives view ASEAN integration as important for their companies, many are doubtful that the ASEAN Economic Community (AEC) will achieve its stated goals by 2015. Of those, most respondents believe that the AEC’s goals will not be realized until 2020 or later.


Nearly half of the reporting manufacturing companies utilize the provisions of ASEAN’s free trade agreements to export from the region to Australia, New Zealand, China, India, Japan and South Korea. Fewer services companies report utilizing the agreements. Regardless of sector, most view these agreements as opportunities rather than threats.


Many respondents are unsure of the potential impact of the two major regional free trade agreements currently being negotiated—the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP). However, of the two, more respondents believe that the TPP will have an impact on their companies’ future investments in the region.


Challenges Remain
Despite general optimism about ASEAN’s business prospects, significant challenges remain.


Corruption is the greatest concern and barrier to trade and investment, followed by infrastructure, laws and regulations, and difficulty moving products through customs. Conversely, personal security and sentiment toward the U.S. are the greatest strengths of the region.


As in previous years, respondents in Singapore report satisfaction with more business factors than respondents from any of the other countries in the region.


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


Only respondents in Singapore are satisfied with all of the government agencies covered by the survey.


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