Indonesia, Vietnam and Myanmar are the top three destinations in Asean for US companies for future expansion despite many challenges, a recent regional survey has found.
Brunei and Laos hold the least interest for respondents in the survey.
The “Asean Business Survey Outlook 2015”, carried out by the American Chamber of Commerce (AmCham) Singapore and the US Chamber of Commerce, revealed dissatisfaction with Thailand, the third-most-attractive destination in Asean in the previous year’s survey.
“Respondents see personal security, positive sentiments towards the US, housing costs, and infrastructure as major strengths in Thailand. The lack of a stable government and political system and corruption are cited as the biggest challenges with 80 per cent and 71 per cent of respondents, respectively, indicating dissatisfaction. Increasing labour costs have also led to a 26-percentage-point decrease in satisfaction with the availability of low-cost labour since 2009,” the survey said.
Following is the survey on other nine Asean countries.
Major strengths cited by respondents in Cambodia include availability of low-cost labour and positive sentiment towards the US. Corruption remains a problem, as 82 per cent of respondents expressed concern, up from 65 per cent last year.
Indonesia was rated as the top destination in Asean for expansion, despite the many challenges companies cite in doing business there. Overwhelmingly, insufficient infrastructure was identified as the greatest drawback. Other significant challenges include corruption, finding trained personnel, moving products through customs, and problematic laws and regulations. Satisfaction with personal security in Indonesia has increased by 24 percentage points since 2009.
Sentiment towards the US, the quality of infrastructure, and reasonable office lease costs are significant strengths for Malaysia and the country enjoys moderate strengths across many business factors. In contrast, corruption and personal security remain challenges. Additionally, Malaysia continues to battle with the pitfalls of the middle-income trap relative to the rapid growth potential of its Asean neighbours. As Malaysia moves up the value chain, the satisfaction level with the availability of trained personnel, infrastructure, and office lease costs have significantly decreased.
Myanmar is one of the most popular countries for business expansion in Asean, offering a ready supply of affordable labour, personal security, and positive sentiments toward the US. In addition, US companies are viewed more favourably in Myanmar than in any other Asean country. However, the US business leaders currently operating in Myanmar cite 11 out of the 16 business factors in the survey as challenges. The highest levels of dissatisfaction are with the cost of housing, infrastructure, lack of trained labour, and office lease costs.
Satisfaction in the Philippines increased across nine of the 16 business factors over the last five years, led by a 23-percentage-point increase in satisfaction with the stability of the government and political system. A total of 86 per cent of respondents are satisfied with the positive sentiments towards the US and 78 per cent with the availability of trained personnel in the Philippines, each representing the highest percentage in Asean. Insufficient infrastructure, corruption, the difficulty of moving products through customs, and the tax structure remain challenges in the country.
Singapore-based respondents cite greater satisfaction across polled business factors than any other Asean country. Major strengths in Singapore include personal security, a stable government and political system, infrastructure, and a lack of corruption.
Vietnam is the second-most-listed location for business expansion in Asean. Its strengths include positive sentiments towards the US, the availability of low-cost labour, and the level of personal security. Respondents indicate that corruption is one of the biggest problems in Vietnam, with 69 per cent of respondents indicating dissatisfaction.