SINGAPORE, March 15 — The economies of the Association of South-east Asian Nations (Asean) have become less attractive financially for American companies to conduct business last year than they were in 2013, a recent survey showed.
Higher costs in labour, housing and office leasing were some of the main reasons that led to a growing dissatisfaction in the region’s business environment.
The findings came from the 17th edition of the Asean Business Outlook Survey, which was done by the American Chamber of Commerce in Singapore (AmCham) and took in the views of 210 respondents who are AmCham members. They work in American companies that have businesses in the 10 Asean countries.
Released on Wednesday, the survey findings are used as one of the barometres to assess American business sentiments in South-east Asia.
The survey report noted that the dip in appeal is ironically a result of the region’s growth: “Asean’s own success has caused dissatisfaction as cost increases affect bottom lines.”
Out of the 16 business environment factors, which included availability of raw materials, trained personnel, lack of corruption, infrastructure as well as free movement of goods within the region, there was a drop in satisfaction rate for 15 factors.
Only personal security showed a better satisfaction rate.
Despite the growing dissatisfaction, Asean remains an important market to the American companies, as trade and investment in the region rise steadily and profit outlooks remain positive.
“Optimism towards Asean as a business and investment destination remains high,” the report stated.
As for Singapore in particular, there was an increase in satisfaction for 12 out of the 16 business factors, with infrastructure, personal security and stable government and political system having the highest jump.
Speaking at the launch event of the survey report, Singapore’s Foreign Affairs Minister Vivian Balakrishnan said that American companies should take advantage of Singapore’s position as the hub of South-east Asia.
“In 20 years’ time, Asean — if we get it right — we would hopefully reach US$10 trillion dollars combined GDP (gross domestic product), which would then make us about the fourth or fifth largest economy,” he said.
Dr Balakrishnan also lauded the many years of economic co-operation between both countries and spoke about how American multinational companies that set up shop in Singapore’s post-colonial years have helped contribute to the city-state’s economic development.
Noting that Singapore is the US’ largest trading partner among South-east Asian states, he said: “Everytime I see (US) President (Donald) Trump, I remind him that the US has a trade surplus of US$20 billion against Singapore.”
This drew laughter from the audience. Before the trade dispute with China started, Trump was constantly harping on how the US has trade deficits with several of its trading partners, including Mexico, Canada and, most of all, China.
Touching on the ongoing trade tensions between the US and China, Dr Balakrishnan said that Singapore is watching the ongoing negotiations between both countries with “great concern”.
“As an open economy, as a city-state in which our trade volumes are three times our GDP, we obviously have a lot riding on these negotiations in which we have no say. But any sign of increased trade conflict between US and China will have profound implications on all of us.”
Addressing Singapore’s bilateral relations with Malaysia, Dr Balakrishnan highlighted the difference between both countries which were once part of a single sovereign entity.
While not directly responding to Malaysia’s foreign minister’s claim on Tuesday that he insinuated that Malaysia has governance issues, Dr Balakrishnan said that Singapore separated from Malaysia in 1965 and was “thrust” into independence because of “a fundamental difference in political and social ideology”.
“Basically, on this side of Causeway, we wanted a fair and just society with equal rights for everyone, whereas on the other side, because of their own unique history and legacy, they had to make alternative political arrangements,” he added. — TODAY
