Most businesses perceive the ASEAN economic integration by the end of 2015 as presenting more of an opportunity than a threat, and their interest in the region remains strong with more investors seeing it as one region for making their investment decisions.
These are some of the key findings from the 2013 ASEAN-BAC (ASEAN Business Advisory Council) Survey on ASEAN Competitiveness, which collated more than 500 responses across various firms from different industries from all 10 ASEAN member-economies.
The survey found that more than half of the businesses considered the ASEAN economic integration as posing a low or very low threat to their organizations, averaging 2.49 on a scale of 1 for very low to 5 for very high.
Close to 60 percent of the businesses considered the ASEAN economic integration as providing high or very high opportunity for their organizations, giving the opportunity level an average rating of 3.59 on a scale of 1 to 5.
However, the survey also noted that a lower share of small or local firms shared this sentiment.
Businesses continued to view the ASEAN region’s competitiveness for investments positively. More than half of the businesses that had internationalized or planned to do so within the next three years indicated an ASEAN country as the most attractive country in the world for their outward foreign direct investment (OFDI).
This reflected investors’ sustained or increased interest in ASEAN countries, most notably Myanmar, the ASEAN said in a statement.
ASEAN’s attractiveness also continued to be rated higher than China’s, both as a market for goods and services and as a production location.
Ninety four percent of businesses planned to invest or increase investments in an ASEAN country over the next three years.
The main reason for investing in ASEAN countries, as identified by the largest share of businesses, was to “access a new or growing market,” followed by “supply main or leading customers,” and “low-cost production facilities.”
Close to half of the businesses planned their investments in ASEAN countries over the next three years by considering the investment attractiveness of the ASEAN region as a whole rather than as individual countries.
Businesses expressed slightly above-average satisfaction with ASEAN’s implementation of the ASEAN Economic Community (AEC) blueprint.
“Consultation with businesses” and “dissemination of information” were among the least satisfactory areas rated by businesses.
Businesses also suggested that ASEAN governments improve the rules and regulations on business registration, investment, and customs procedures.
From these findings, the ASEAN-BAC urged the strengthening of the process of information dissemination and consultation with businesses on AEC initiatives.
It also recommended that the ASEAN give priority attention to harmonizing, simplifying, and enhancing the transparency of rules and regulations in the areas of business registration, investment, and customs procedures.
“In particular, ASEAN should redouble its efforts to reach out to local small firms—to allay their fear of ASEAN economic integration as a threat to their businesses and alert them to the opportunities from an AEC.”
It added that the ASEAN should step up measures to help local small firms engage in more export or OFDI activities by addressing their financial constraints, enhancing their understanding of overseas markets, and improving their capabilities.
“This will enable them to participate fully in the AEC and strengthen AEC’s pillar to achieve equitable economic development.”