Malaysia: World’s best country to invest
According to a recent report by Y&R’s BAV Consulting, The Wharton School, and US News & World Report, Malaysia leads as the best country for investments. The report based on a survey of business decision-makers on corruption, dynamism, economic stability, entrepreneurship, tax environment, innovation, labor force, and technological expertise ranks Singapore a close second. Industry experts believe robust growth, stable inflation rate, and low unemployment rates in the past few years provide a conducive environment for investors.
Industries such as services, infrastructure, manufacturing, tourism, education, and construction which are the focus of the 2017 Budget and 11MP Economic Plan, are expected to attract majority of the investment. Industry experts believe the country has a shortage of scientific and technical workforce that can still discourage few investors. The average annual labor productivity growth between 2011 and 2015 was 1.8 percent, less than 11MP target of 3.7 percent. Investors seeking to produce for exports and operating in free trade zones will find Malaysia an efficient economy, while on the other hand, accessing local markets will still be challenging for investors due to non-transparent tender processes.
Indonesian Food and Pharmaceutical sectors attract overseas manufacturers
The growing pharmaceutical and F&B manufacturing sectors are attracting the world’s leading processing and industrial machinery suppliers. The manufacturing industry in 2015 represented 18.1 percent of the GDP and was worth US$ 156 billion. F&B accounted for 30.8 percent of the total revenue from all of the non-oil and gas manufacturing industries. Chemicals, pharmaceuticals, and traditional medicine sectors contributed 9.58 percent. Industrial equipment manufacturers such as SMC and NEU Group have already established manufacturing bases in the country in the past few years to cater to the local demand.
Indonesia’s pharmaceutical market doubled in value between 2008 and 2015, growing to US$7 billion from US$3 billion. The market is expected to be worth US$12.6 billion by 2020, driven by government’s economic initiatives. A growing population is the major factor for the growth of pharmaceuticals and F&B industry in the country. Going ahead, manufacturers are predicted to adopt integrated solutions as many customers have started to prefer one-stop manufacturing solutions and sourcing from single suppliers.
Philippines: Focusing on the BPO sector
The country’s offshoring and outsourcing sector has overtaken remittances from overseas workers as the country’s largest source of foreign currency but still industry experts are concerned over the sustainability of the sector. As of September 2016, total revenue from business process outsourcing (BPO) was US$15.5 billion and year-end revenues is projected to account for about 10 percent of the country’s GDP. Experts believe several factors such as US anti-outsourcing policies, automation, and lack of skilled employees can affect the future development of the sector.
To maintain growth, the sector has started focusing on skill-based services rather than voice solutions. Numerous BPO firms have already started providing skill-based services, including IT, accounting, health, software development, and games design. The industry is also shifting its focus from Metro Manila district to other provinces and serving clients from non-English speaking countries. As per the 2017-2019 Investment Priorities Plan, IT-BPM (Information Technology- Business process management) firms in the Metro Manila area will no longer be eligible for income-tax holidays after 2020. This will encourage BPO firms to move to less developed regions and away from Metro Manila. Firms have also started to focus on businesses based out of Singapore, China, Europe, Japan, and Hong Kong where English is not a predominant language for local businesses.
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