The EU-ASEAN Business Council, the primary business body for European businesses in ASEAN, yesterday published its 6th Business Sentiment Survey.
Key highlights of this year’s survey include 53 per cent of respondents saw ASEAN as the region with the best economic opportunity (63 per cent in 2019).
Forty-seven per cent of respondents were considering re-organising supply chains post-COVID-19, with ASEAN, Europe and China as the top destinations. Seventy-three per cent of respondents expected to expand current levels of trade and investment in ASEAN in the next five years (84 per cent in 2019).
Only two per cent of respondents felt that ASEAN Economic Integration is progressing fast enough (six per cent in 2019). Only four per cent of respondents found ASEAN customs procedures speedy and efficient (eight per cent in 2019).
Sixty-two per cent of respondents that use supply chains reported facing many barriers to the efficient use of supply chains in ASEAN (78 per cent in 2019). Ninety-eight per cent of respondents would like the European Union (EU) to accelerate free trade agreement (FTA) negotiations with ASEAN and its members (96 per cent in 2019).
Commenting on the survey, Chairman of the EU-ASEAN Business Council Donald Kanak said, “This year’s survey confirms that ASEAN is still seen as the region of best economic opportunity, but as would be expected during the COVID-19 crisis, the outlook for increased trade and investment shows signs of softening.”
This year’s survey asked which regions in the post-COVID-19 era would be candidates to attract more investment on supply chains. While ASEAN received the most votes, others such as Europe and China also received many.
Kanak said, “Almost half expected supply chains to be re-organised following COVID-19. That makes the unfinished business on the ASEAN economic integration and progress on trade facilitation crucial to ASEAN’s sustainable recovery from the economic downturn.”
Executive Director of the EU-ASEAN Business Council Chris Humphrey added, “The message from the survey is clear: ASEAN Economic Integration appears to be at a standstill. ASEAN and its constituents need to pick up the pace to meet the AEC Blueprint 2025 goals.
European businesses are now adjusting their business strategy according to local environments, rather than waiting for substantial progress in regional economic integration.
European businesses are also very concerned about the lack of progress on further FTAs with the ASEAN region, and in particular the long talked about region-to-region FTA which eight out of 10 see as potentially delivering more benefits that a series of bilateral FTAs. European businesses clearly want the European Commission to step up the pace of negotiations and engagement with Southeast Asia.”
The survey was conducted from April to July 2020 during the height of the pandemic and lockdowns in the region. In total, 680 respondents were recorded from European businesses in the public and private sector across the 10 ASEAN member states. Respondents were either in the services or manufacturing industries, ranging from hospitality and tourism to the manufacture of pharmaceuticals and medical equipment.
According to the survey, respondents were asked on the level of satisfaction in the ASEAN region government’s response to the pandemic, and Singapore was named as one of the three ASEAN member states with a majority satisfaction level.