U.S. businesses keen on Asia despite uncertainties
U.S. businesses keen on Asia despite uncertainties
Agence France-Presse, Singapore
Asia remains an attractive region for U.S. investments despite concerns over slowing economic growth, top U.S. business executives said in a survey released here Tuesday.
The Southeast Asia-based executives said they expect to hire more employees, expand operations and post profits this year despite becoming less optimistic about economic prospects globally and in their countries of operation.
Corruption, however, remained a major concern in countries like Indonesia and the Philippines and to a lesser extent in Malaysia, according to the survey by the Association of Southeast Asian Nations (ASEAN) American Chambers of Commerce.
"Our members have become more cautious about the future outlook for the global and local economies, but Asia is believed to have continued growth opportunities," said Nicholas de Boursac, executive director of the American Chamber of Commerce Singapore.
"Asian markets are clearly regarded as increasingly important to a company's international competitiveness and continued growth. This is a sentiment shared by a majority of members in all the surveyed ASEAN countries."
Nearly 370 members of the American Chambers of Commerce in Indonesia, Malaysia, the Philippines, Thailand, Singapore and Vietnam participated in the survey, which had a margin of error of plus or minus 4.0 percent.
It was carried out for the U.S. business groups by polling specialist Gallup Organization from April 19 and May 10, before oil prices breached US$60 a barrel.
In the survey, only 29 percent of the executives expect the global economy to improve this year, down from 66 percent in 2004.
Thirty-six percent expect local economic conditions to get better, down from 69 percent last year, with 38 percent expecting the situation to remain.
De Boursac, who presented the findings, said soaring oil prices, a hike in U.S. interest rates and the widening U.S. trade deficit were among the factors dampening business sentiment.
Despite becoming less optimistic over economic prospects, 81 percent of the respondents believe Asia's contribution to their firm's global revenues and operations will rise in the next two years, and 80 percent said they would expand their operations in the region.
More than half said they expect to grow their workforce, while 61 percent expect profit growth this year, with the optimism rising to 80 percent in 2006.
U.S. business executives in Vietnam were the most upbeat, with 78 percent expecting the Vietnamese economy to perform better this year.
American Chambers of Commerce members in Indonesia, Malaysia and Singapore said they expect the economies in their areas of operation to attain the same level, if not better, than last year.
A "substantial portion of members" from the Philippines and Thailand expect the economies of these two countries to decline this year, the survey said.
Corruption emerged as a key impediment to investments in the region, de Boursac said.
"This, in combination with weak laws and regulations, has a significant effect on investment decisions and hampers business competitiveness," he added.
Ninety-six percent of respondents in Indonesia said they were "very dissatisfied or dissatisfied" with corruption in that country, followed by the Philippines with 88 percent, Vietnam 66 percent, Thailand 63 percent and Malaysia 46 percent.
Singapore got high marks for incorruptibility, but U.S. businesses in the city-state were concerned more with the high costs of labor, housing and office rentals.
The ASEAN American Chambers of Commerce represent an estimated US$50 billion of investments in the region.