US firms confident Asia will weather crisis
FINANCIAL TURMOIL IN SOUTH-EAST ASIA
* WAIT-AND-SEE ————–
AMERICAN firms are confident that Asian countries will weather the current economic crisis but many are adopting a “wait-and-see” attitude before committing large-scale investments in the region.
“A lot of companies want to see how the situation plays out and what it will look like six months to a year down the road,” US-Asean Business Council spokesman John Goyer said yesterday.
“It is extremely difficult in the current environment to make them make commitments for investments ranging in the hundreds of millions of dollars.”
He was speaking at a joint press conference with Asean Secretary-General Rodolfo Severino who earlier held talks with members of the business council, a private organisation that represents the interests of 400 American companies in Asean.
The council is in Indonesia as part of a regional swing to underscore its business commitments to countries affected by the financial crisis.
Mr Goyer said that despite the region’s economic malaise, US firms were confident that countries, including Indonesia, would bounce back.
“There is a great deal of confidence that the region will resume economic growth at some point,” he said. “Many companies are long-term investors and they have been here a long time to know what to expect.”
He stressed that American business interests had not waned despite the “wait-and-see” posture of some firms. Backing his argument with statistics, he noted:
* Accumulated American investments in the region stood at US$35 billion (S$61.6 billion) in 1996
* Asean was the third largest export market for the US. The US exported goods worth US$44 billion to the region in 1996.
* Two-way trade stood at US$110 billion and was growing.
Said Mr Goyer: “So the interest is there and American companies will continue to be interested in the region.”
Responding to a question, he said that it was likely that US imports from the region would increase as a result of the currency devaluations which has seen the Indonesian rupiah, Thai baht and Malaysian ringgit nosedive to record lows.
The council’s president, Mr Ernest Bower, maintained that the US private sector would continue to be engaged in South-east Asia, adding: “We are here to try and see how we can assist the Asean countries and how we can be part of the solution and to get the wheels of the economy turning.”
Mr Severino said that discussions with the US businessmen yesterday underscored the fact that the current economic problems offered opportunities for firms to re-position themselves in the region.
He said: “Solid investors do not overlook the many positive developments that have unfolded.
“These corporations are in Asean for the long haul. They are not fair-weather friends, running away with their money at the first sign of trouble. They are serious and dependable partners.”