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BIMP-EAGA’s Economic Corridors Business Perceptions about the Investment Climate

BIMP-EAGA’s Economic Corridors Business Perceptions about the Investment Climate
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BIMP-EAGA’s Economic Corridors Business Perceptions about the Investment Climate
Date Published
April 01, 2017

This study looks at the factors affecting decisions to invest in the two main corridors of BIMP-EAGA: the West Borneo Economic Corridor and Greater Sulu–Sulawesi Corridor. The report surveyed 70 businesses across 20 industries.

Survey results show that businesses consider the following when making investment decisions:

  • complementarities in cross-border production activities and services,
  • investment incentives,
  • infrastructure,
  • regulatory environment, and
  • governance.

Businesses welcomed the progress made by BIMP-EAGA in improving the regulatory environment but remained concerned over bureaucratic and administrative obstacles to doing business.

In particular, businesses are concerned about deficiencies in trading costs between the BIMP-EAGA member countries. Poor connectivity across corridor provinces and states is also a concern, as well as price competitiveness linked to exchange rate movements. Companies along the two economic corridors also expressed concern about their lack of knowledge about laws and regulations governing business practices in neighboring provinces or states and the types of product designs and preferences by consumers. Also, companies noted their lack of knowledge about the types of downstream and upstream activities that exist in corridor provinces and states.

To encourage businesses to invest apart from improving connectivity, BIMP-EAGA needs to commit to creating an enabling environment for cross-border investments and forming an institution that would implement cross-border programs and projects. The subregion also needs champions to promote cross-border collaboration, networking, training, and research and development collaboration by companies. It needs high-profile pilot projects that can showcase the benefits of corridor value chains to potential investors.

CONTENTS

  • BIMP-EAGA’s Economic Corridors
  • Business Sentiment About the Investment Climate
  • Aligning Existing Conditions with Best Practices
  • Regulatory Environment
  • Connectivity
  • Macroeconomic Environment
  • Exchange Rates and Price Competitiveness
  • Trading Environment
  • Imperatives for Attracting Corridor Investments