The 2017 ASEAN Business Outlook Survey finds that U.S. companies maintain a steady sense of optimism about growth prospects and commercial opportunities in ASEAN. More than half of respondents (53%) report that ASEAN markets have become more important in terms of their companies’ worldwide revenue over the past two years, and 78% of executives project increases in 2017. Close to half of the surveyed companies (49%) expect to increase their ASEAN workforce by the end of 2016. The overwhelming majority of respondents (87%) expect that their companies’ level of trade and investment in ASEAN will increase over the next 5 years.
2016 is an important year for ASEAN. The ASEAN Economic Community (AEC) was inaugurated at the end of 2015 and, although it remains a work in progress, survey respondents anticipate that it will provide greater flexibility and efficiency in managing their regional operations. Survey respondents emphasize that more work needs to be done to combat the challenges of corruption, transparency, and governance that inhibit greater ASEAN integration.
U.S. businesses also expect that the Trans-Pacific Partnership (TPP) will increase their trade and investment in the region. 34% of U.S. businesses across ASEAN expect that the TPP will lead them to increase their investment in the region. However, at the time of this writing, the outlook for TPP’s passage by the U.S. Congress is very uncertain. Meanwhile, as negotiations on the Regional Comprehensive Economic Partnership (RCEP) progress, U.S. companies express uncertainty about whether, when completed, it will further expand and streamline trade connections between ASEAN and the wider Asia-Pacific region.U.S. companies place great emphasis on hiring locally. As a result, the increasingly well-educated and skilled talent pool in ASEAN is important to these companies’ ability to expand their investments in the region. This year’s survey includes a new section that discusses talent sourcing and workforce development in ASEAN. The survey finds that the attributes most valued by U.S. businesses in ASEAN are creativity, analytical problem- solving, technical skills, and effective communication.
U.S. businesses’ competitiveness in ASEAN also depends on their ability to recruit and retain home talent. While American employers report some limitations in their hiring practices as a result of the U.S.’s taxation of its citizens’ worldwide income and Foreign Account Tax Compliance Act (FATCA), they remain inclined to hire home-country professionals for essential positions in their regional operations.
While an overall confident business outlook holds much promise for growth across ASEAN, a number of critical challenges remain for American companies. Corruption persists as the primary concern across the region with the exception of Brunei and Singapore. Government transparency, regulatory efficiency, and policy engagement are emphasized as priority areas in which ASEAN governments and American business leaders could work together more productively.
In many respects, U.S. companies’ satisfaction and optimism regarding ASEAN’s business environment has remained high but has plateaued. Corruption remains a significant challenge to doing business in ASEAN. When asked to rank satisfaction with factors relating to business environment, respondents report the most improvement in the stability of government and political systems. Overall, Vietnam stands out with the greatest improvement in satisfaction levels across all business environment characteristics.
Credits to: US Chamber of Commerce