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Business Pulse 2010: Expert Perspectives on the AACCLA and AmCham Member Poll

Business Pulse 2010: Expert Perspectives on the AACCLA and AmCham Member Poll. Business Pulse 2010. August-September 2010 Over 1300 respondents 22 countries. Democracy – Rule of Law – Economies – Trade – Security – Energy - Politics – U.S. Policy - IP. Priorities for U.S Policy.

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Business Pulse 2010: Expert Perspectives on the AACCLA and AmCham Member Poll

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  1. Business Pulse 2010: Expert Perspectives on the AACCLA and AmCham Member Poll

  2. Business Pulse 2010 August-September 2010 Over 1300 respondents 22 countries Democracy – Rule of Law – Economies – Trade – Security – Energy - Politics – U.S. Policy - IP

  3. Priorities for U.S Policy

  4. Forecast: Uncertain While last years poll showed a brigthening forecast for 2010, this year respondents are much more uncertain. Respondents were split with 40% pessimistic with regards to the 2014 economic and political outlook and 38% optimistic.

  5. Forecast: Regional Growth Nearly three fourths of respondents do not forsee a regional growth in excess of 5% as estimated by the U.N Economic Comission for Latin America and the Caribbean.

  6. Forecast: National Growth Nearly three fourths see positive national growth in 2010: 4% of respondentsseegrowth of >6% 24% of respondents see growth from 4% to 6% 26% of respondentsseegrowth of 2% to 4% 19% of respondentsseegrowthfrom 0 to 2% 12% see a decreasefrom 0% to -2% 11% see a decreasefrom -2% to -4% 4% leftsee a decreasebelow -4%

  7. Forecast: Business Concerns Greatest External Threats to Business • Global economic instability (33% ) • Political instability (23% ) • Expropriation (13% ) • Terrorist or criminal activity (11% ) • Other (11%) • Competition from state owned/controlled actors (10% ) • Natural disaster (1%)

  8. Forecast: Populism The Future of Populism and Authoritarianism • 39% - populism and authoritarianism on the rise • Down from 47% in 2009 • 30% say that populism has passed the peak of its regional influence • In 2009, 29% of the respondents believed that populism was entrenched while 14% responded populism was going to decline • In 2010, only 23% say populism is entrenched

  9. Forecast: Economic nationalism Divided Views: • 45% say foreign enterprises at a disadvantage • 48% see no favoritism toward national producers The Uncertain Future of Economic Nationalism

  10. Forecast: Customs laws Customs laws and procedures are currently: • Inadequate to meet the dual objectives of enforcement and trade facilitation (38%) • Appropriate, but subject to inconsistent application (27%) • Overly restrictive to trade (24%) • Appropriate (11%)

  11. Forecast: Hot Investments 2007: Infrastructure and Energy (47%) Tech and Telecom (22%) Manufacturing (13%) 2008: Infrastructure and Energy (46%) Tech and Telecom (18%) Manufacturing (15%) 2009: Energy (26%)/Infrastructure (22%) Tech and Telecom (15%) Tourism (10%) 2010: Energy (29%)/ Technology (20%) Manufacturing (15%) Infrastructure (10%) / Mining (10%)

  12. Forecast: U.S Investment in Energy More than one-third believe U.S investment is critical for growth in the energy sector • U.S. investment is critical (35%) • Investment opportunities are limited until there is legal/regulatory reform (30%) • Investment is important, but the U.S. has not been a factor compared to third countries (17%) • The sector is likely to grow with or without U.S. investment (19%)

  13. Forecast: U.S Perception Since 2008, the perception of U.S has:

  14. Ranking Reforms Short-term Reform Priorities • Strengthening the rule of law and fighting corruption (47%) • Strengthening physical security and crime (21%) • Reducing or simplifying taxes and regulations (12%)

  15. Ranking Reforms Short Term

  16. Ranking Reforms Policies to Sustain Economic Growth in the Long Term Rule of Law tops long-term priorities • Strengthening the rule of law and fighting corruption (38%) • Improving public education (23%) • Reforms aimed at reducing poverty and improving income distribution (13%)

  17. Ranking Reforms Long Term

  18. Education – Role of Business Nearly half (48% ) of all of respondents suggested the best role for business is through public/private partnerships. However, more than one-fourth (26%) believe businesses should prioritize training and internships.

  19. Education – Obstacles to Reform Who’s to Blame for a Lack of Educational Reform? 33% say governments fail to prioritize education, while 21% point to mismanagement of funding, and 8% to a lack of oversight 21% blame the teachers’ unions 9% say civil society is uninvolved; 4% finger lack of business involvement

  20. Environment – Tough Enough? Only 4% of respondents believe their countries environmental laws are excessive and only 11% believe they are appropriate. 34% find their domestic labor laws inadequate MORE THAN HALF (52%) believe the laws are appropriate, but simply not enforced

  21. New IP Laws- Understanding Two thirds believe that there is no widespread comprehension of what having IP laws means for development.

  22. Doing Business – Start up Companies starting-up are most likely to encounter problems due to: • 36% of respondents note the number of processes involved in business start-up, such as obtaining permits and licenses. • Another 14% cite lack of transparency in laws and regulations. • 5% cite the cost of starting a business; 7%, the time it takes • 5% found none of these considerations problematic. • Almost half of respondents (44%) said the lack of clear rules or weak rule of law is the main problem. Rule of Law and Bureaucracy

  23. Doing Business - Profitability Political Instability Continues to Hamper Profitability.

  24. Doing Business - Security The Readiness of Companies to handle a security crisis (including a natural disaster): • 65% Not ready! • 35% say they are

  25. Institutions - Corruption Reducing Corruption through Stronger Democratic Institutions and Independent Judicial Systems 57% say stronger democratic institutions andindependent judicial systems are key to reducing corruption Number one for the second year (2009 - 40%) 24% greater transparency and accountability in public institutions is what their country needs to reduce corruption and strengthen the rule of law.

  26. Institutions – Rule of Law Overall, 28% of respondents view rule of law and investor protections in their countries as Strong (3%) or Adequatebut Improving (25%). This perception has diminished significantly from the 43% in last years poll. Nearly three-fourths (71%) view rule of law as Adequate but Deteriorating (15%) or Poor (56%). In 2009 poll the percentage was only 57%.

  27. Institutions - Democracy Threats to Democracy

  28. Institutions – Democracy support Multilateral Organizations in the Americas • 16% of respondents believe multilaterals are appropriately supporting democratic institutions, while 35% say they are not. • 29% cite multilateral organizations have no impact on democratic institutions in the region, and the 19% left don't know.

  29. Institutions - Reversals Democratic reversals anathema to investment! A whopping 88% say strong democratic institutions are fundamental to their investment decisions Companies less likely to invest or expand business in countries that have had setbacks

  30. Business Pulse 2010: Expert Perspectives on the AACCLA and AmCham Member Poll Thank you to our respondents!

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