02 ECONOMIC OUTLOOK 04 ASEAN INTEGRATION AND FTAS 06 BUSINESS EXPANSION IN ASEAN 10 STRENGTHS AND CHALLENGES 11 WORKFORCE EXPANSION 11 EXPATRIATE SATISFACTION 14 CAMBODIA REPORT HIGHLIGH
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The American Chamber of Commerce in Singapore (AmCham Singapore) and the U.S Chamber of Commerce, in cooperation with other AmChams in the ASEAN region, conducted
a study among AmCham members of American businesses in seven Southeast Asian countries: Cambodia, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam This study, now in its 11th year, builds on previous studies conducted by AmCham Singapore and the U.S Chamber of Commerce The purpose of the study was to understand members’ outlook on business growth and perceptions about a series of local factors in the ASEAN region The members surveyed were senior executives, working with for a companyies held by
or with an American majority interests For the irst time in 2012, multiple senior members from each U.S company were asked to complete the survey
This regional report presents collective feedback received from senior members of: The American Chamber of Commerce in Singapore, The U.S Chamber of Commerce, The American Cambodian Business Council, The American Malaysian Chamber of Commerce, The American Chamber of Commerce of The Philippines, The American Chamber of Commerce in Indonesia, The American Chamber of Commerce in Thailand, and The American Chamber of Commerce in Vietnam (Ho Chi Minh City and Hanoi)
INTRODUCTION CONTENTS
EXECUTIVE SUMMARY
• The outlook on investment opportunities in ASEAN is good across the region, with 92% of respondents indicating a positive outlook, with 70% of respondents plan to expand their business in ASEAN
• Expansion is expected to continue region-wide The most popular location for expansion
is Vietnam, followed by Thailand
• Companies view ASEAN economic integration as very important, yet are sceptical that ASEAN will achieve its ASEAN Economic Community (AEC) goals by 2015
• Fewer than half of the respondents say they can utilize the provisions of ASEAN’s free trade agreements with major trading partners, including China, India, Japan, Australia
& New Zealand, and South Korea Large majorities indicated that those agreements are important to their future investment plans in the region
• Corruption continues to be the most signiicant concern across the region In addition, housing costs emerged as a new concern this year, most prominent in Singapore
02 ECONOMIC OUTLOOK
04 ASEAN INTEGRATION AND FTAS
06 BUSINESS EXPANSION IN ASEAN
10 STRENGTHS AND CHALLENGES
11 WORKFORCE EXPANSION
11 EXPATRIATE SATISFACTION
14 CAMBODIA REPORT HIGHLIGHTS
15 INDONESIA REPORT HIGHLIGHTS
16 MALAYSIA REPORT HIGHLIGHTS
17 PHILIPPINES REPORT HIGHLIGHTS
18 SINGAPORE REPORT HIGHLIGHTS
19 THAILAND REPORT HIGHLIGHTS
20 VIETNAM REPORT HIGHLIGHTS
21 SURVEY METHODOLOGY
21 PROFILE OF RESPONDENTS
23 ACKNOWLEDGEMENTS
Trang 390% of survey respondents expect their companies’ trade and investment to increase in the ASEAN region over the next ive years 27% expect the level to increase signiicantly
PROFIT OUTLOOK
The majority of respondents (70%) expect their companies’ proits to increase in 2012 and 85% expect a proit increase in 2013
Level of Trade/Investment in ASEAN Past 2 Years
Increase signiicantly Increase Stay at about the same level Decrease
Increase signiicantly Increase Stay at about the same level Decrease
Level of Trade/Investment in ASEAN Next 5 Years
Compared to 2011, do you expect your profits in ASEAN to increase,
decrease, or remain the same in 2012 and 2013?
ECONOMIC OUTLOOK
INVESTMENT OPPORTUNITY IN ASEAN
ASEAN’s economic outlook continues to be positive after the volatility of the past few years
More than nine in ten business executives (92%) have a positive or very positive outlook on
the investment opportunities for their company in the ASEAN region Respondents in both the
services and manufacturing sectors were equally positive, at 90%
At least 84% of respondents indicate a positive outlook for the region as a whole
Respondents in Cambodia and Indonesia have the most optimistic outlooks of all countries
surveyed, with 100% reporting a positive or very positive outlook, while those in the
Philippines are nearly as optimistic (96% positive or very positive)
Very positive Somewhat positive Neutral Negative
ASEAN Investment Opportunity Outlook
Business executives report strong increases in the level of investment by their company
in the ASEAN region 79% of respondents indicate that their company’s level of trade and investment in the ASEAN region has increased in the past two years One quarter of the respondents say it has increased signiicantly, while 17% say it has stayed about the same, and 3% say it has decreased
Regional
Total
Singapore Malaysia Vietnam Philippines Thailand Indonesia Cambodia
ASEAN Investment Opportunity Outlook (By Country)
6%
1%
37%
55%
5%
2%
37%
56%
7%
0%
47%
47%
9%
0%
41%
49%
3%
0%
38%
58%
13%
2%
38%
47%
0%
32%
68%
0%
19%
81%
Negative Neutral Positive Very Positive Very Negative
Trang 4FINANCING AND COSTS OF BORROWING
The percentage of respondents experiencing signiicant inancing constraints has decreased
over the past three years, from 24% in 2009 to 20% in 2011 and 19% in 2012 Regional
experiences with costs of borrowing remained similar to those of the past two years, with
much variance across the region
IMPORTANCE OF ASEAN INTEGRATION
ASEAN economic integration is valuable to majority of respondents, with 65% reporting that
this integration is important to helping their companies do business in the region Of all the
countries surveyed, executives in Vietnam had the highest positive response rate (76%)
Percentage of respondents facing significant financing constraints
Regional
Total
Percentage of respondents facing higher costs of borrowing
Regional
Total
Is ASEAN integration important to helping your company do business in the region?
ASEAN INTEGRATION AND FTAs
ASEAN REGIONAL AGREEMENTS
Business executives in the ASEAN region consider each of the ive regional agreements assessed to be important to their company’s investment plans in the region Importance ratings range from 64% for the Framework Agreement on Services to 55% on the Comprehensive Investment Agreement
ASEAN FREE TRADE AGREEMENTS
Fewer than half of business executives surveyed say their company can utilize the provisions
of ASEAN’s free trade agreements with major trading partners 47% of respondents report that their companies can use the provisions of the ASEAN-China agreement, while 30% can
do so under the Korea agreement
The data below shows the responses for each agreement
Can your company utilize the provisions of the agreement to export goods or services from ASEAN to the specified country?
Australia &
New Zealand
Importance of ASEAN Regional Agreements
Important Neutral / Not Important / Not Sure
64%
61%
60%
58%
55%
36%
39%
40%
42%
45%
Trang 5DIVERSIFYING OPERATIONS FROM CHINA TO ASEAN
In this year’s survey, signiicantly more respondents reported that their companies are planning to diversify some investments or business from China into ASEAN over the next two years than when asked in 2011 Vietnam is the only country in which fewer respondents plan
to diversify investments away from China in 2012
BUSINESS DIRECTION IN MYANMAR
The large majority of respondents (72%) either support or strongly support the United States government’s decision to suspend some sanctions currently placed on Myanmar Only 2% of the respondents are in opposition to suspending sanctions Respondents based in Cambodia are the strongest supporters, with 81% indicating either support or strong support
“Yes” 2011 “Yes” 2012
Does your company plan to diversify some investments or business from China into
ASEAN Over the Next Two Years?
Strongly Oppose Oppose Neutral Support Strongly Support
Please indicate how you feel about the United States government suspending
sanctions on Myanmar
However, the majority of respondents consider the ASEAN Free Trade Agreements to be
either important or extremely important to their investment plans in the region
LOCATION OF BUSINESS EXPANSION IN ASEAN
Vietnam is by far the most popular location for expansion, receiving 57% of responses
Thailand is the second most popular location at only 11% No respondents indicated that
their top location for expansion was Brunei
BUSINESS EXPANSION IN ASEAN
Importance of ASEAN FTAs
Australia and New Zealand
Not at all Important Not Important Neutral Important Extremely Important
Location of Expansion in ASEAN
Vietnam Thailand Singapore Philippines Indonesia Myanmar Cambodia Malaysia Laos
Trang 633% of respondents are either currently exporting, planning to export, or considering
exporting Vietnam and Thailand had the largest numbers of respondents considering
exporting to Myanmar, at 22% and 21%, respectively
35% of respondents currently invest in Myanmar or planning or considering doing so in the
future In Cambodia, 31% of respondents are currently investing or planning to invest, making
it the country with the highest interest
Not Sure Do not export and no plans
to export
Considering Exporting Planning to Export Currently Exporting
Which one of the following best describes your export activity with Myanmar?
Not Sure Do not invest and currently
no plans to invest
Considering investing Planning to invest Currently investing
Investment activity with Myanmar
Trang 7LOCAL BUSINESS ENVIRONMENT
Excluding respondents from Singapore, corruption and laws and regulations continue to be
sources of dissatisfaction for respondents, similar to indings in 2011, 2010, and 2009 In fact,
corruption was the highest source of dissatisfaction for all countries except Singapore and
Malaysia
Sentiment towards the U.S remains highly positive across the ASEAN region and is a major
strength in every country, with satisfaction above 50%
Respondents across the region are also satisied with personal security in all the countries with
the exception of Malaysia, in which responses were mixed
STRENGTHS AND CHALLENGES
Factors Regional Malaysia Philippines Singapore Thailand Vietnam Indonesia Cambodia
Availability of raw materials 52%
Availability of trained
personnel/eficient
manpower
Local protectionism
Stable government and
New business incentives by
Ease of moving products
Free movement of goods
Strength: 50% or greater satisfaction rate Concern: 40% or greater dissatisfaction
EXPAT ASSIGNMENT SATISFACTION
The majority of respondents (51%) stated that their companies regularly receive requests from employees based in other locations to work in their response location This is an increase from 39% in 2011 and 2010
EXPATRIATE SATISFACTION
Does your company regularly receive requests from employees based in other
locations to work in your response location?
“Yes” 2010 “Yes” 2011 “Yes” 2012
OVERALL WORKFORCE BY COUNTRY
The majority of respondents (60%) predict an increase in their companies’ ASEAN overall workforce Only 4% expect a decrease, while 36% expect it to remain about the same This data is comparable with 2011 data
WORKFORCE EXPANSION
Decrease Same Increase
Do you expect your total number of employees in the response location to
increase, decrease, or remain about the same in 2012?
Trang 8EXPAT SATISFACTION IN RESPONSE LOCATION
Satisfaction rates remain high at 96%, a slight increase from the past two years
REQUESTS FOR EXTENSION OF ASSIGNMENTS
Results show that, in most countries, increasing numbers of expatriate employees attempt
to extend their time in their response location within ASEAN In 2012, Thailand was the only
country in which fewer respondents stated that expatriate employees attempt to extend their
time there
Do your expatriate employees attempt to extend their time in your response location?
“Yes” 2010 “Yes” 2011 “Yes” 2012
Are your expatriate employees generally satisfied with their assignments in
your response location?
“Yes” 2010 “Yes” 2011 “Yes” 2012
EXPATRIATE SATISFACTION
Trang 9Outlook for Investment Opportunities
in ASEAN
Profit Outlook 2012
Profit Outlook 2013
CAMBODIA
Target Countries for Business Expansion
Major Strengths (% Satisied) Major Concerns (% Dissatisied)
Stable government and political system (75%) Corruption (81%) Sentiment towards the
U.S (75%) Availability of trained personnel/eficient
manpower (50%) Availability of low cost
labor (69%)
Laws and Regulations (44%)
Personal security (56%) Infrastructure (44%) Ofice lease costs (56%)
Free movement of goods within the region (56%)
BUSINESS OUTLOOK
ASEAN Economic Outlook:
• All respondents maintain a positive or
very positive outlook for the ASEAN
region as an investment opportunity for
their companies
Current Business Climate:
• Percentage of respondents facing
signiicant inancing constraints
decreased from 28% in 2011 to 13% in
2012
• The majority of respondents (73%) are not
facing higher costs of borrowing in 2012
Importance of ASEAN Markets in Global
Business:
• 69% of respondents reported that
ASEAN markets have increased in
importance to their companies in the past
two years
• Most respondents (75%) expect ASEAN
importance to continue to increase in the
next two years
Business Direction and Movement in
ASEAN:
• 75% of respondents plan to expand their
companies’ business in ASEAN
Proit Outlook:
• 88% expect a proit increase in 2012
• 88% expect a proit increase in 2013
Workforce Expansion:
• 69% expect a workforce increase in 2012
• 27% expect an increase of 5 to 10%
• 27% expect an increase of 15 to 20%
BUSINESS OUTLOOK
ASEAN Economic Outlook:
• All respondents in Indonesia indicated
a positive or very positive outlook for the ASEAN region as an investment opportunity for their companies
Current Business Climate:
• Respondents facing signiicant inancing constraints decreased from 22% in 2011
to 13% in 2012
• The large majority of respondents (74%) are not facing higher costs of borrowing in 2012
Importance of ASEAN Markets in Global Business:
• 84% of respondents reported that ASEAN markets have increased in importance to their companies in the past two years
• Most respondents (84%) also expect ASEAN importance to increase in the next two years
Business Direction and Movement in ASEAN:
• 81% of respondents plan to expand their companies in ASEAN
Proit Outlook:
• 77% expect a proit increase in 2012
• 90% expect a proit increase in 2013
Workforce Expansion:
• 58% expect a workforce increase in 2012
• 28% expect an increase of 20 to 50%
Target Countries for Business Expansion
Outlook for Investment Opportunities
in ASEAN
Profit Outlook 2012
Profit Outlook 2013
INDONESIA
Major Strengths (% Satisied) Major Concerns (% Dissatisied)
Availability of low cost labor (71%) Corruption (87%) Ofice lease costs (58%) Infrastructure (74%) Sentiment towards U.S
(58%) Local protectionism (71%) Housing costs (55%) Laws and Regulations
(61%) Ease of moving products through customs (52%)
Trang 10BUSINESS OUTLOOK
ASEAN Economic Outlook:
• 94% of respondents maintain a positive
or very positive outlook for the ASEAN
region as an investment opportunity for
their companies
Current Business Climate:
• Respondents facing signiicant inancing
constraints decreased from 15% in 2011
to 3% in 2012
• There has been a decrease in those facing
higher costs of borrowing, from 37% in 2011
to 13% in 2012
Importance of ASEAN Markets in Global
Business:
• 53% of respondents report that ASEAN
markets have increased in importance to
their companies in the past two years
• The majority of respondents (60%)
expect ASEAN importance to increase in
the next two years
Business Direction and Movement in
ASEAN:
• 70% of respondents’ companies plan to
expand in ASEAN, and none expect to
contract
Proit Outlook:
• 70% expect a proit increase in 2012
• 80% expect a proit increase in 2013
Workforce Expansion:
• 50% expect a workforce increase in 2012
• 40% expect an increase of 5-10%
Target Countries for Business Expansion
Outlook for Investment Opportunities
in ASEAN
Profit Outlook 2012
Profit Outlook 2013
MALAYSIA
Vietnam Thailand Indonesia Malaysia Philippines
Major Strengths (% Satisied) Major Concerns (% Dissatisied)
Infrastructure (90%) Corruption (48%) Sentiment towards U.S
(76%) Personal security (38%) Ofice Lease Costs
Free movement of goods within the region (66%) Ease of moving your products through customs (66%) Stable government and political system (62%)
BUSINESS OUTLOOK
ASEAN Economic Outlook:
• 92% of respondents maintain a positive
or very positive outlook for the ASEAN region as an investment opportunity for their companies
Current Business Climate:
• Respondents facing signiicant inancing constraints decreased from 24% in 2011
to 18% in 2012
• Most respondents (80%) are not facing higher costs of borrowing in 2012
Importance of ASEAN Markets in Global Business:
• 63% of respondents reported that ASEAN markets have increased in importance to their companies in the past two years
• The majority of respondents (58%) expect ASEAN importance to increase in the next two years
Business Direction and Movement in ASEAN:
• 83% of respondents’ companies plan to expand in ASEAN
Proit Outlook:
• 73% expect a proit increase in 2012
• 88% expect a proit increase in 2013
Workforce Expansion:
• 75% expect a workforce increase in 2012
• 30% expect an increase of 20 to 50% Major Strengths
(% Satisied) Major Concerns (% Dissatisied)
Sentiment towards the U.S (83%) Corruption (73%) Availability of trained
personnel/eficient manpower (78%)
Laws and Regulations (43%)
Availability of low cost labor (73%)
Ease of moving products through customs (43%) Ofice lease costs (60%) Infrastructure (40%)
Target Countries for Business Expansion
Outlook for Investment Opportunities
in ASEAN
Profit Outlook 2012
Profit Outlook 2013
PHILIPPINES
Philippines Vietnam Singapore Thailand Myanmar Indonesia