Apr 3, 2012

Brunei - Brunei lags in investment survey

BRUNEI offers the least attractive prospects amongst ASEAN countries for companies in the region to make offshore direct investments over the next three years, according to a survey.

ASEAN overall has "good prospects" for attracting investments in the next few years, but only 0.3 per cent of the respondents in the 2011-2012 Asean Business Advisory Council Survey (ABAC) on ASEAN Competitiveness chose the Sultanate as a destination for offshore direct investments.

Brunei trails behind the Philippines and Cambodia (0.6 per cent respectively), while Singapore and Vietnam both offered the best prospects for direct investment opportunities for 7.9 per cent of the respondents.

As a region, ASEAN was favoured by 36.5 per cent of the survey respondents, while 27.9 per cent of respondents were eyeing investing in China and 27 per cent choosing countries like Australia, Brazil, Japan and the United Kingdom for their investments in the near future.

ASEAN was also rated as more attractive than China, in terms of as a market for the sale of goods and services as well as a production location, according to findings from the survey.

"ASEAN's overall attractiveness influence business investment decisions. A significant 39 per cent of businesses considered the investment attractiveness of ASEAN as a whole when planning their investments in ASEAN countries over the next three years," said the report.

"This might suggest that ASEAN's move to create a single market and production base is gaining recognition; some two-thirds of the businesses that considered ASEAN's overall attractiveness had at least general knowledge of ASEAN policy initiatives."

Nearly 90 per cent of survey respondents indicated that they would invest or increase their existing investments into at least one ASEAN member economy, including the country in which the company is based, over the next three years.

"Half of the businesses intended to invest in Indonesia, while over 40 percent of businesses planned to do so in Vietnam, Singapore, Thailand and Malaysia," the survey findings said.

In contrast, only 17 per cent of respondents said they would do so in Brunei, placing the Sultanate at the bottom of the ASEAN table in terms of investment attractiveness by ASEAN country. Brunei received an average rating of 3.41 out of 10.

However, Brunei has the second lowest level of constraints in its business environment after Singapore, based on the survey's feedback on businesses' view of the overall operating environment in the country they were based in. Although, it was noted that the ASEAN economies shared "few" common constraints faced by the businesses.

In Brunei, as well as Laos, business licensing and operating permits posed the "highest degree" of constraint to businesses operating there. However, the Sultanate fared comparatively better in its political stability and "crime, theft and disorder" among ASEAN.

The survey also found that 20 per cent of businesses in Brunei made use of free trade agreements ASEAN has entered into, compared to Singapore (29 per cent), Thailand (47 per cent) and Vietnam (45 per cent), to name a few.

The survey derived the findings from 405 "usable" responses from the ASEAN businesses surveyed. Indonesian companies represented more than a quarter of total respondents, while Singapore, Vietnam, Thailand and the Philippines together contributed another 47 per cent.

Some six per cent of the respondents came from Brunei.

In terms of size, 40 per cent of the respondents were from small firms, while 24 and 36

per cent were from medium- and large-sized enterprises respectively, the survey findings said. The 24-page document also noted that ASEAN did not have a standard definition for Small and Medium Enterprises in ASEAN.

In the report, the companies were classified by employment size thresholds, where small, medium and large firms are defined as those having less than 50 employees, 50-200 and more than 200 employees, respectively.

Just under half of the business participating in the survey were from the services sector, followed by 37 per cent in the manufacturing sector and 18 per cent in sectors such as agriculture, mining and construction.

"Two-thirds of the businesses were wholly locally-owned, while the remaining one-third had varying degrees of foreign ownership," the report said.

The survey was released yesterday, a product of collaboration between ABAC and an assistant professor at the Lee Kuan Yew School of Public Policy, National University of Singapore.

A Singapore ABAC member, Dr Robert Yap in a press release on the report, said, "ASEAN economic integration can only be achieved through close cooperation among stakeholders. It is important for policy makers in ASEAN to know what the business community think(s) and to respond to their concerns."

UBAIDILLAH MASLI
The Brunei Times

Business & Investment Opportunities 
YourVietnamExpert is a division of Saigon Business Corporation Pte Ltd, Incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Healthcare and Life Science with expertise in ASEAN. We also propose Higher Education, as a bridge between educational structures and industries, by supporting international programmes. Many thanks for visiting www.yourvietnamexpert.com and/or contacting us at contact@yourvietnamexpert.com

No comments:

Post a Comment