Asean's business community cautiously optimistic about AEC

ASEAN'S business community is largely optimistic about the prospects for 2015, despite or because of cheap oil prices and a strong US dollar. Indonesia is expected to be a star performer. And the era of the Asean Economic Community (AEC), scheduled to start at the end of 2015, is largely being welcomed, although few people expect any major changes before the end of the decade.

These are some of the top findings of a survey by Ipsos Business Consulting of 866 executives across Indonesia, Malaysia, Singapore, Thailand, the Philippines and Vietnam. Some of the variance across countries shows where priorities lie. Indonesia may be the market where most executives were expecting to make their money in 2015, but Singapore was voted as the country most likely to benefit from the AEC. Vietnam executives are much more concerned with disturbances in the South China Sea in 2015 than their counterparts elsewhere. Malaysian executives see the drop in oil prices as being one of the biggest challenges to their economy this year. And there are some interesting variations by seniority in the outlook for the region, with CEO concerns over lack of staff skills not being shared by their teams.

Survey respondents, mostly representatives of large and multinational enterprises, viewed intra-Asean trade as a difficult process. A retail sector manager from Malaysia complained of "the restriction by Asean country governments hampering the growth of multinationals". A vice-president from the automotive sector in Singapore complained about "inefficient government approval processes and corruption . . . non-tariff-trade barriers . . . and local standards which are not in line with international standards". And yet this executive, along with most of the other 865 surveyed, seemed to feel optimistic about the region as a whole and that the AEC is "a step in the right direction". The recommendation from this respondent and others was that, at this stage, it was best to focus on some of the stronger individual markets rather than to roll out regional marketing plans.