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
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