Why Singapore is still ASEAN's best business hubBY GREGORY TIRRELL
The results of AmCham’s recently published 2014 ASEAN Business Outlook Survey clearly show that U.S. companies remain bullish on growth in Singapore and throughout ASEAN.
The ASEAN Business Outlook Survey shares the insights of senior American business leaders located across the ASEAN region. These respondents are charged with making investment decisions on behalf their companies, which is why the Chamber believes the results of this survey are so valuable.
Singapore remains the leader in ASEAN across a number of factors the survey asks about. AmCham believes that Singapore is the place to be for businesses that plan to reach multiple countries in the ASEAN market and the fact that 96% of survey respondents from Singapore have regional responsibility backs up this belief.
Major strengths in Singapore include a stable government and political system (90% satisfaction) and effective laws and regulations (84% satisfaction). These factors lay a crucial foundation for business success in the region.
Furthermore, one of the key characteristics that differentiates Singapore from its neighbors is the lack of corruption. Corruption was a top issue for respondents in all countries except Singapore and Brunei, and at AmCham we often hearfrom our membersthat corruption remains a significant challenge inmany ASEAN countries.
Lack of corruption and ease of doing business contribute to Singapore being such a desirable place for business headquarters in Asia.
Singapore does pose challenges for businesses, however, but these are typical of a developed and thriving economy: lack of low cost labor, high office lease costs, and high housing costs. Yet, on a five year basis, satisfaction with both office lease costs and housing costs has actually increased.
We interpret this increase in satisfaction as the result of rapid property development over the past five years, reducing capacity constraints.
60% of respondents in Singapore indicate that their companies are planning to expand their domestic operations and56% are planning to expand their domestic workforce during 2013. Despite the small local market and high costs of doing business in the Singapore, it is clear that businesses continue to view the island nation as a hub for investment in ASEAN.
Because Singapore is such a regional hub, the pulse of the city is connected to the pulse of the regional economy. The Chamber was happy to see that ASEAN markets continue to become increasingly important to U.S. companies in terms of worldwide revenue. 91% of respondents expect their company’s level of trade and investment in the ASEAN region to increase over the next five years.
This is great news for Singapore and for the region as a whole. Compared with 2012, respondents are optimistic about their profit outlook in ASEAN for the rest of this year and even more optimistic about next year, with 84% of business leaders across the region expecting an increase in profits in 2014.
We hope for these profits to translate to increased investment in the countries across the region as we continue to see rapid economic development.
2013 marks the twelfth year of the survey and we were very excited to expand our survey to include respondents from all ten ASEAN countries, adding Brunei, Laos, and Myanmar for the first time.
AmCham presented the survey results jointly with the U.S. Chamber of Commerce at the 45th ASEAN Economic Ministers Meeting in Brunei in August and received very positive feedback from the trade ministers in attendance.
The ASEAN Business Outlook Survey is the only study of its kind and showcases the perspectives of senior business leaders in ASEAN. The report has a global readership and is relied on by both business leaders and policymakers across the region. You can view the full ASEAN Outlook Survey on our website at www.amcham.org.sg/aseanoutlook.
For more information, please contact AmCham’s Head of Regional and Public Affairs, Tom McNutt at firstname.lastname@example.org.