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.