CEOs upbeat on future of Apec : survey

According to Pricewaterhouse-Coopers (Thailand) chief executive officer Sira Intarakumthornchai, the "Towards Resilience and Growth: Asia-Pacific Business in Transition" survey conducted by PwC from June to August showed that CEOs in 21 Apec member countries were optimistic despite the current risk factors – a weak US economy, European Union debt problems and China’s economic slowdown.

Forty-two per cent of the CEOs were confident of their firms’ revenue growth in the next 12 months, an improvement over the 36 per cent of the preceding survey. Moreover, 68 per cent expressed intention to increase investment next year despite some concerns over the sluggish regional economy and capital outflows. Fifty-two per cent were confident of revenue growth of their businesses in the next three to five years, Sira said.

Factors contributing to the optimism of the CEOs are general revenue growth projections, per capita income, rapid urban growth, investment in basic infrastructure, formation of regional trading blocs to foster closer cooperation, and reduction of trade barriers among Apec nations, he added. Laws, rules and regulations have been made more conducive to foreign investments and more protective of their investments and interests, he said.

The survey found that 35 per cent of respondents still saw China and the United States as the prime investment areas for the next three to five years, followed by Australia (29 per cent), New Zealand (26 per cent) and Indonesia (15 per cent). Economies with strengths in the service sector in this region are Hong Kong (15 per cent) and Japan (14 per cent).

According to Dennis Nally, president of PricewaterhouseCoopers International Ltd, the sluggish global economy and the EU debt crisis will still affect the rate of growth in the Asia-Pacific region, which will play a vital role in driving global economic growth.

Sira said that according to the survey, countries such as Indonesia (19 per cent), Myanmar (11 per cent) and China (8 per cent) were considered "economic dark horses" with strong growth potential in the long term, thanks to improved workers’ skills, political stability and abundant natural resources. Other nations that should not be overlooked are the Philippines, Vietnam and India .

The CEOs believe that cooperation among governments, bilateral and multilateral trade and investment, and other cooperative efforts will contribute significantly to their businesses and draw more foreign investment to this region.

The two most vital factors that CEOs believe have an impact on their businesses are regulatory changes and basic infrastructure developments – electricity, water, transport and sanitation.

The Asian Development Bank expects that the Asia-Pacific region still needs investments of as much as US$8 trillion (Bt250 trillion) between 2010 and 2020 to maintain the current economic growth rates, Sira said.

Other results are as follows:

- Nearly 90 per cent of the CEOs surveyed view middle-income consumer markets as having the strongest influence on business growth strategy, while almost half of the additional investments were channelled towards addition of new products, services and distribution channels.

- Investment in telecommunications and transport in major cities will support economic expansion similarly to revision in laws and regulations that hinder trade and investment.

- Protection of intellectual-property rights and strict compliance to corporate governance are also very important to the CEOs surveyed by PwC.

- More than 70 per cent of the CEOs surveyed want to see more trade negotiation forums for the Apec member countries. However, 22 per cent of Apec leaders said such negotiations might lead to uncertainties and increases in management expenses.