US investors now less satisfied with Thailand

THE The survey has been tracking US investor satisfaction with 16 aspects of the business environment from 2006 to 2015 and in the past five years. 

While satisfaction with Thailand has declined, investor confidence has been steadily increasing in some neighbouring countries, such as Malaysia, Vietnam and Cambodia. For example, investor satisfaction with new business incentives offered by the government has risen by 25 per cent over the past five years in Malaysia and decreased by 5 per cent in Thailand. 

US companies identified a variety of concerns and impediments to their growth in the region. 

As in previous years’ surveys, corruption was the top issue across Asean, cited by the majority of respondents in all countries except Brunei and Singapore. 

In Thailand, respondents identified the Customs Department as the government agency that most impedes growth, in line with findings from previous years. Moreover, 63 per cent of polled executives in Thailand said the government rarely or never considered input from the private sector on new laws and regulations (up from 45 per cent in last year’s survey).

Meanwhile, US companies remain generally optimistic about business prospects in Asean. In a poll of 471 senior executives representing US companies in all 10 Asean countries, 72 per cent reported that their company’s level of trade and investment in Asean had increased over the past two years, and an overwhelming 86 per cent expected it to increase over the next five years.

Despite the high degree of investor confidence, there has been a downturn in the level of optimism over the past few years. More than half (53 per cent) of respondents said Asean markets had become more important in terms of their companies’ worldwide revenues over the past two years, but this is 10 percentage points lower than reported two years earlier. 

In addition, two-thirds (66 per cent) of respondents this year expect Asean to become more important in terms of worldwide revenues over the next two years; while still high, this is 7 percentage points lower than two years earlier. In Thailand, 44 per cent of respondents said Asean markets had increased in importance in the past two years and 61 per cent expect this importance to increase in the next two years. In terms of business expansion, 57 per cent of the polled executives in Thailand reported that their companies planned to expand in the country, while half expected their workforce to increase in 2016.

“These results indicate that competitiveness is not something you achieve once and enjoy forever; remaining competitive is a process that requires a firm commitment and continuous tweaking and adjusting of laws and regulations to build and support a favourable business environment,” said Darren Buckley, president of the American Chamber of Commerce in Thailand. 

“In order to remain attractive to investors, Thailand will have to keep in step with neighbouring countries as they open their economies and entice investors with attractive incentives,” he said.

US companies also highlighted burdensome laws and regulations, lack of transparency, poor quality of infrastructure, and the difficulty in moving products through customs in some countries as obstacles to greater investment. 

More than 77 per cent of respondents to this year’s survey reported that exchange-rate volatility had a “significant” or “somewhat significant” impact on their business operations in the region.