PwC APEC CEO Survey Towards Resilience & Growth2013

8/22/2019 PwC APEC CEO Survey Towards Resilience & Growth2013

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Towards resilienceand growth

PwC 2013APEC CEO Survey



2013 APEC CEO Survey

WelcomeWishnuWardhana

APEC CEOSummit 2013,Chair

APEC Business Advisory Council (ABAC) 2013,Chair

PT Indika Energy Tbk, President Director and GroupCEO





About this report Dennis Nally

PricewaterhouseCoopers International Limited, Chairman



Contents

1. The right model for a changingregion

2. Agent of change

3. Bridging infrastructure gaps

4. Where business and regional

policy priorities intersect

5. Chartpack

6. Foundations of the Future



2 ¤ Ð©Ý îðïí ßÐÛÝ ÝÛÑ Í«®ª»§

transition

Building the right model to prosper in achanging region



Ì±©¿®¼- ®»-·´·»²½» ¿²¼ ¹®±©¬¸ ¤ 3

We aremost impressedwith America’s ‘energy revolution’, and it is

China’s the engine that drives things, and it’s

Í±«®½»æ Ð©Ý îðïí ßÐÛÝ ÝÛÑ Í«®ª»§ å îðïî ßÐÛÝ ÝÛÑ Í«®ª»§

Ïæ Ý±²-·¼»®·²¹ §±«® ±®¹¿²·-¿¬·±²- ·²ª»-¬³»²¬- ·² ßÐÛÝ »½±²±³·»- ±ª»® ¬¸» ²»¨¬ ïî ³±²¬¸-ô ¿®» §±« °´¿²²·²¹ ±²á ¤ Þ¿-»æ ìéè

ø»¨½´«¼»- ¼±²¬ µ²±© ¿²¼ ²± ¿²-©»® ®»-°±²-»-÷

Ïæ

Þ¿-»æ îðïíæ ìéèå îðïîæ íëê




will be the political systems

in Asia.Asia is becoming a democratic region.

We believe in Indonesia’s

potential, with its young

population…The challenge

growthmomentum. There’s a

need toaddress things like the

×²ª»-¬³»²¬- ¿®» -»´»½¬·ª» ¿- ¾«-·²»--»- ¬«²» ¿´´±½¿¬·±²- º±® ¼±³»-¬·½ó

³¿®µ»¬ ¹®±©¬¸ °±¬»²¬·¿´ ±ª»® ¬¸» ²»¨¬ íë §»¿®-ò

Ò±¬»æ ß² ±ª»®¿´´ ®¿²µ ©¿- -½±®»¼ º®±³ ®»-°±²-»- ®¿²µ»¼ ·² ±®¼»® º®±³ »½±²±³§ ©·¬¸ ³±-¬

·²½®»¿-»¼ ·²ª»-¬³»²¬ò

Í±«®½»æ Ð© Ý îðïí ßÐÛÝ ÝÛÑ Í«®ª»§

Ïæ Ð´»¿-» -»´»½¬ ¬¸» ¬±° ë ßÐÛÝ »½±²±³·»- ©¸»®» §±«® ±®¹¿²·-¿¬·±² ·- ·²½®»¿-·²¹

Þ¿-»æ ììí ø»¨½´«¼»- ²±²» ±º ¬¸» ¿¾±ª» ¿²¼ ²±¬

¿²-©»®»¼ ®»-°±²-»-÷



Ì±©¿®¼- ®»-·´·»²½» ¿²¼ ¹®±©¬¸ ¤ 5

Innovation and services capabilitiescapture new investments

Î»-·´·»²½» ³«-¬ ½±³» º®±³ ©·¬¸·²ò

Í±«®½»æ Ñ¨º±®¼ Û½±²±³·½-å Ð©Ý ¿²¿´§-·-




¾«-·²»-- ·²ª»-¬³»²¬

Ì¸» °®±³·-» ±º ¾«-·²»-- ¹®±©¬¸ º®±³ ®·-·²¹ ³·¼¼´»ó·²½±³» ½±²-«³»®- ¸¿- ¾»»² ½´»¿® º±® ¿ ¼»½¿¼»ò

Í±«®½»æ Ð©Ý îðïí ßÐÛÝ ÝÛÑ Í«®ª»§

Ïæ Ì¸·²µ·²¹ ±º ¬¸±-» ßÐÛÝ »½±²±³·»- ©¸»®» §±«® ±®¹¿²·-¿¬·±² ·- ·²½®»¿-·²¹ ·²ª»-¬³»²¬ ±ª»® ¬¸» ²»¨¬ ïî ³±²¬¸-ô ©¸¿¬ °®±°±®¬·±² ©·´´ ¾»

¿´´±½¿¬»¼ ¬± ¬ »̧ º±´´±©·²¹ ¿®»¿-á ¤ Þ¿-»æ ììí

Ïæ

Þ¿-»æ ìéè ø»¨½´«¼»- ²±¬ ¿°°´·½¿¾´»ô

¼±²¬ µ²±©ô ¿²¼ ²± ¿²-©»® ®»-°±²-»-÷



Ì±©¿®¼- ®»-·´·»²½» ¿²¼ ¹®±©¬¸ ¤ 7

We are restructuring, andwe’re moving now tomuch

workingwith customers and understanding their needs.

products will be created in the process leading

to Renminbi (RMB) internationalisation?

·²½±³»- ®·-»

Í±«®½»æ Ñ¨º±®¼ Û½±²±³·½-å Ð©Ý ¿²¿´§-·-




Agent of changeThewinners in this industry,

in any industry, will be

the oneswho really start

to think end to end, all the

through their company, out

to their distributor network

and to their end users.



Ì±©¿®¼- ®»-·´·»²½» ¿²¼ ¹®±©¬¸ ¤ 9

Ð«¬¬·²¹ ³·¼¼´»ó·²½±³» ¼»³¿²¼ ¿¬ ¬¸» ½»²¬®» ±º ¾«-·²»-- »¨°¿²-·±² -¬®¿¬»¹·»- ©·´´ ´·µ»´§ ´»¿¼ ¬± ¼·ºº»®»²¬

¼·-¬®·¾«¬·±² ½¸¿²²»´-ô ²»© °¿®¬²»®-¸·°-ô ¿²¼ ³±®» ·²²±ª¿¬·±²ò


Ïæ Ì± ©¸¿¬ »¨¬»²¬ ¿®» §±« ³¿µ·²¹ô ±® ©·´´ ³¿µ»ô ½¸¿²¹»- ·² ¬¸» º±´´±©·²¹ ¿®»¿- ¬± ½¿°·¬¿´·-» ±² ¬¸·- ¼»ª»´±°³»²¬ ø»¨°¿²¼·²¹ ³·¼¼´»ó

Þ¿-»æ²±¬ ¿°°´·½¿¾´»ô ¼±²¬ µ²±©ô ¿²¼ ²± ¿²-©»® ®»-°±²-»-÷




Í¬®»-- °±·²¬- ·² ÎúÜ ¿²¼ ØÎ ¿- ÝÛÑ- °·ª±¬ º±® ½±²-«³»® ¼»³¿²¼


Ïæ Ì± ©¸¿¬ ¼»¹®»» ¿®» ¬¸» º±´´±©·²¹ ¿®»¿- ±º §±«® ±®¹¿²·-¿¬·±² °®»°¿®»¼ ¬± ¿¼¶«-¬ ¬± ½¿°·¬¿´·-» ±² ¬¸» ®·-» ·² ³·¼¼´»ó·²½±³» ½±²-«³»®- ·²

Þ¿-»æ

¿²-©»® ®»-°±²-»-÷



Ì±©¿®¼- ®»-·´·»²½» ¿²¼ ¹®±©¬¸ ¤ 11

with two or three operators, and costs will be much lower.

Þ·¹¹»-¬ ²»»¼ º±® ¬»½¸²·½¿´ô ³¿²¿¹»®·¿´ -µ·´´-ô ¿²¼ »¨»½«¬·ª»- ¿- ÝÛÑ- -»¬ ¹®±©¬¸ °´¿²- º±® ¬¸» ®»¹·±²ò


Ïæ Ð´»¿-» ·²¼·½¿¬» ©¸»®» §±«® ±®¹¿²·-¿¬·±² ·- »¨°»®·»²½·²¹ -µ·´´- -¸±®¬¿¹»- ·² ¬¸» ßÐÛÝ ®»¹·±²ò ¤ Þ¿-»æ ííìô ÝÛÑ- ©¸± ½·¬» -µ·´´-

-¸±®¬¿¹»- ¿- ¿ ¾¿®®·»® ¬± ¾«-·²»-- ¹®±©¬¸




Sizing upmobileopportunities anddigital



Ì±©¿®¼- ®»-·´·»²½» ¿²¼ ¹®±©¬¸ ¤ 13

¿²¼ ñ ±® -»®ª·½»-Ó±¾·´» -¿´»- ¿²¼ °¿§³»²¬- ¿®» ½¸·»º °¿¬¸©¿§- ¬± ¼·¹·¬¿´ ¹®±©¬¸ò


Ïæ Ì¸·²µ·²¹ ¿¾±«¬ ±°°±® ¬«²·¬·»- ·² ¬¸» ¼·¹·¬¿´ »½±²±³§ô ·- §±«® ±®¹¿²·-¿¬·±² ¿½¬·ª» ±® °´¿²²·²¹ ¬± ¾» ¿½¬·ª» ·²á ¤ Þ¿-»æ ìéè ø·²½´«¼»-

²±¬ ¿°°´·½¿¾´»ô ¼±²¬ µ²±©ô ¿²¼ ²± ¿²-©»® ®»-°±²-»-÷

Ïæ Í»´»½¬ ¬¸» ±°¬·±² ¬¸¿¬ ¾»-¬ ¼»-½®·¾»- §±«® ±®¹¿²·-¿¬·±²- ®±´» ¿- ¿ -»®ª·½»- °®±ª·¼»® ¿²¼ ñ ±® ³¿¶±® ½«-¬±³»® ·² ¬¸» º±´´±©·²¹ »³»®¹·²¹

³±¾·´» -»®ª·½»- ³¿®µ»¬-ò ¤ Þ¿-»æ Ó¿¶±® ½«-¬±³»®æ ïíí ø»¨½´«¼»- ±¬¸»® ®»-°±²-»÷å Í»®ª·½»- °®±ª·¼»®æ îïè ø»¨½´«¼»- ±¬¸»® ®»-°±²-»÷




Ë²½»®¬¿·²¬·»- ¿®±«²¼ -¬¿²¼¿®¼- º±® ¼¿¬¿ -¸¿®·²¹ -´±©·²¹ ¼·¹·¬¿´ »¨°¿²-·±²

Ñ°°±®¬«²·¬·»- ½»²¬®» ¿®±«²¼ ½±²²»½¬·²¹ ³±®» ½´±-»´§ ©·¬¸·² ¬¸» ½±³°¿²§ ¿²¼ ©·¬¸ °¿®¬²»®-ò


Ïæ¤ Þ¿-»æ ìéè ø»¨½´«¼»- ²»·¬¸»® ñ ²±®ô ¼±²¬ µ²±©ô ¿²¼ ²± ¿²-©»® ®»-°±²-»-÷



Ì±©¿®¼- ®»-·´·»²½» ¿²¼ ¹®±©¬¸ ¤ 15

People are becomingmore responsive than in previous

it possible. This is a good thing though as it opens upopportunities.

Í³¿®¬°¸±²» °»²»¬®¿¬·±²æ Ì¸» ²«³¾»® ¬± ©¿¬½¸ ·² ³±¾·´» ·²²±ª¿¬·±²

É¸¿¬ ¸¿°°»²- ¿- -³¿®¬°¸±²» «-» ¸·¬- ½®·¬·½¿´ ³¿--á Ó±¾·´» ¼·-®«°¬·±² ·² ¬¸» º±®³ ±º ²»© ¾«-·²»-- ³±¼»´- ·²

¸»¿´¬¸ô ¿«¬±³±¬·ª»ô ¿²¼ ³±®»ò

Í±«®½»æ




infrastructure development?

Bridging the infrastructure gaps in

Ñ°»² ¬± ²»© ©¿§- ±º ·²ª»-¬·²¹ ¿²¼ ¼»ª»´±°·²¹ ·²º®¿-¬®«½¬«®»

³»»¬ ¬¸» ¼»³¿²¼ò


Ïæ Ì± ©¸¿¬ »¨¬»²¬ ·- §±«® ±®¹¿²·-¿¬·±² °«®-«·²¹ ¾«-·²»-- ®»´¿¬·±²- ·̧°- ·² ¬¸» º±´´±©·²¹ ¿®»¿-ô ¾»½¿«-» ¬¸»§ ¿®» ·³°±®¬¿²¬ ¬± §±«®Ð®·ª¿¬»ó°«¾ ·́½ ·²º®¿-¬®«½¬«®» ³±¼»´- ¤ Þ¿-»æ ìéè ø»¨½´«¼»- ²±¬ ¿°°´·½¿¾´»ô ¼±²¬ µ²±©ô

¿²¼ ²± ¿²-©»® ®»-°±²-»-÷

Ïæ

»½±²±³§áÛ¨·-¬ ·²¹ ×Ì ·²º®¿-¬®«½¬«®» ¤ Þ¿-»æ ìéè ø»¨½´«¼»- ²»·¬¸»® ñ ²±®ô ¼±²¬ µ²±©ô ¿²¼ ²± ¿²-©»® ®»-°±²-»-÷



Ì±©¿®¼- ®»-·´·»²½» ¿²¼ ¹®±©¬¸ ¤ 17

The region is developing a large

the region, being intermediated

away into EuropeorAmerica.Weneedmechanisms tomake sure that

well in Asia and used inside Asia

the country’s gross domestic product.

×²º®¿-¬®«½¬«®» ¼»ª»´±°³»²¬ ·- ²»»¼»¼ ¬± -«°°±®¬ ®·-·²¹ °®±-°»®·¬§ò

Í±«®½»æ Û½±²±³·-¬ ×²¬»´´·¹»²½» Ë²·¬ô ¾¿-»¼ ±² ®»-»¿®½¸ º®±³ É±®´¼ Þ¿²µô Ó½Õ·²-»§

Ù´±¾¿´ ×²-¬·¬«¬»å Ð©Ý »-¬·³¿¬»-




infrastructure development

We cannot ignore the current economic growth, which

And as Pertamina is an energy company, we have to

political stability in the region, we can improve the investments



Ì±©¿®¼- ®»-·´·»²½» ¿²¼ ¹®±©¬¸ ¤ 19

É¸»®» ·- ·²º®¿-¬®«½¬«®» ²»»¼»¼ ³±-¬á

ÝÛÑ- ¾»´·»ª» ½¸¿²¹»- ¬± ®»¹«´¿¬±®§ ¿²¼ ¬®¿¼» ·²º®¿-¬®«½¬«®»- ¿®» ³±-¬ ½®«½·¿´ º±® ¾«-·²»--ò É¸»² ·¬ ½±³»- ¬±

¬¸»·® »½±²±³·»-ô ¼»ª»´±°·²¹ ¬¸» ¬»½¸ ¹®·¼- ¿²¼ «®¾¿² ¬®¿²-°±®¬ ¿®» ¬¸» °¿¬¸- ¬± ¹®±©¬¸ò


Ïæ Ì± ©¸¿¬ ¼»¹®»» ©±«´¼ º«®¬¸»® ¼»ª»´±°³»²¬ ·² ¬¸» º±´´±©·²¹ ·²º®¿-¬®«½¬«®» ½¿¬»¹±®·»- ·² ¬¸» ßÐÛÝ ®»¹·±² ½®»¿¬» ¹®±©¬¸ ±°°±® ¬«²·¬·»- º±®

§±«® ±®¹¿²·-¿¬·±²á ¤ Þ¿-»æ ìéè ø»¨½´«¼»- ²±¬ ¿°°´·½¿¾´»ô ¼±²¬ µ²±©ô ¿²¼ ²± ¿²-©»® ®»-°±²-»-÷

Ïæ Ì± ©¸¿¬ ¼»¹®»» ©±«´¼ º«®¬¸»® ·²ª»-¬³»²¬ ·² ¬¸» º±´´±©·²¹ ·²º®¿-¬®«½¬«®» ½¿¬»¹±®·»- ½®»¿¬» ¹®±©¬¸ ±°°±®¬«²·¬·»- º±® §±«® °®·²½·°¿´

»½±²±³§á ¤ Þ¿-»æ ìéè ø»¨½´«¼»- ²±¬ ¿°°´·½¿¾´»ô ¼±²¬ µ²±©ô ¿²¼ ²± ¿²-©»® ®»-°±²-»-÷




words—Value chain

Where business and regional policy

We have ourownport in

Indonesia…Wealso have

rail, barge and our own

hauling roads. Sowhat we

need to investmore in, in

utilisation or synchronisation

as well as optimisation.

Many relatively small

sellers…are engaging with

international customers

in a way that’s muchmore

much lower costs and much

transactions thanever

got ahead and the policies

are waiting to catch up.



Ì±©¿®¼- ®»-·´·»²½» ¿²¼ ¹®±©¬¸ ¤ 21

agreements that cover 10 or

economies, you take a great

That reduces costs. It reduces

waste. It makes things more

available because companies

will make the products

Harmonised regulations

would help us access markets

more easily. Basically,

wewould knowwhat

we need to do to get our

products across borders.

É¸¿¬- ¸±´¼·²¹ ¾¿½µ ³±®» ¾«-·²»-- ·²ª»-¬³»²¬ ·² ß-·¿

Î»¹«´¿¬±®§ ½±²-·-¬»²½§ ½±«´¼ «²´»¿-¸ ³±®» ·²ª»-¬³»²¬ ·² ¬¸» ®»¹·±²ò

Ý±®°±®¿¬» ¹±ª»®²¿²½»ô ·²¬»´´»½¬«¿´ °®±°»®¬§ °®±¬»½¬·±²ô ¿²¼ -»®ª·½»- ¬±°

¬¸» ´·-¬ò


Ïæ Ø±© ´·µ»´§ ±® «²´·µ»´§ ©±«´¼ §±«® ±®¹¿²·-¿¬·±² ¾» ¬± ·²ª»-¬ ³±®» ·² ¬¸» ßÐÛÝ ®»¹·±² ·º

¬¸» º±´´±©·²¹ ®»¹«´¿¬·±²- ±® -¬¿²¼¿®¼- ©»®» ¸¿®³±²·-»¼ ¿½®±-- ¬¸» ®»¹·±²á ¤ Þ¿-»æ ìéè

ø»¨½´«¼»- ²±¬ ¿°°´·½¿¾´»ô ¼±²¬ µ²±©ô ¿²¼ ²± ¿²-©»® ®»-°±²-»-÷

Ïæ ß²¼ ±º ¬¸»-»ô ©¸»®» ·- ¬¸» ¹±¿´ ±º «²·º±®³ -¬¿²¼¿®¼- ±® ®»¹«´¿¬·±²- ¿½®±-- ¬¸» ®»¹·±²

³±-¬ ·³°±®¬¿²¬ ¬± §±«® ±®¹¿²·-¿¬·±²- ¹®±©¬¸ °®±-°»½¬-ô ·º ¿¬ ¿´´á ¤ Þ¿-»æ ìéè ø»¨½´«¼»-

²±¬ ¿°°´·½¿¾´»ô ¼±²¬ µ²±©ô ¿²¼ ²± ¿²-©»® ®»-°±²-»-÷




Whatqualitiesmakean economy—or aregion—resilient?

commitment to sustainable growth. Our ability to create

what is beyond our property line. Air pollution, oil spills at

our resort property line, andrequire collective andaligned

action between business, communities, and regulators.



Ì±©¿®¼- ®»-·´·»²½» ¿²¼ ¹®±©¬¸ ¤ 23


Ïæ Ì± ©¸¿¬ »¨¬»²¬ ¼± §±« ¿¹®»» ±® ¼·-¿¹®»» Ó«´¬·°´» ®»¹·±²¿´ ¬®¿¼» ¬®¿½µ- ¿®» ½®»¿¬·²¹ ³±®» ¹®±©¬¸ ±°°±®¬«²·¬·»- º±® ±«® ±®¹¿²·-¿¬·±²

Þ¿-»æ ìéè ø»¨½´«¼»- ²±¬ ¿°°´·½¿¾´»ô

¿²¼ ²± ¿²-©»® ®»-°±²-»-÷




ÙÜÐ °»®½»²¬¿¹» ¹¿·²- ¾§ îðîë ¿¾±ª» ¾«-·²»--ó¿-ó«-«¿´ ¾¿-»´·²» ¼»°»²¼·²¹ ±² ¬¸» ·³°´»³»²¬¿¬·±² ±º

°®±°±-»¼ ¬®¿¼» °¿¬¸-ò

Í±«®½»æ

¾§ Ð»¬»® ßò Ð»¬®·ô Ó·½¸¿»´ Ùò Ð´«³³»®ô ¿²¼ Ú¿² Æ¸¿·ô Ð»¬»®-±² ×²-¬·¬«¬» º±® ×²¬»®²¿¬·±²¿´ Û½±²±³·½-ô •Ð±´·½§ ß²¿´§-»- ·² ×²¬»®²¿¬·±²¿´Û½±²±³·½- Ò±ò çèô Ò±ª»³¾»® îðïîò Ð´»¿-» ²±¬» ¬¸¿¬ ¬¸» ¿«¬¸±®- ¿³»²¼»¼ ¬¸» -¬«¼§ ¬± ¿¼¼ Ö¿°¿² ¿²¼ Õ±®»¿ ¿- -·¹²¿¬±®·»- ·² ¬¸»

º±´´±©·²¹ ¿¼¼»²¼«³æ ß¼¼·²¹ Ö¿°¿² ¿²¼ Õ±®»¿ ¬± ¬¸» ÌÐÐ ¾§ Ð»¬»® ßò Ð»¬®·ô Ó·½¸¿»´ Ùò Ð´«³³»®ô ¿²¼ Ú¿² Æ¸¿·ò



Ì±©¿®¼- ®»-·´·»²½» ¿²¼ ¹®±©¬¸ ¤ 25

É¸¿¬ ³¿µ»- ¿² »½±²±³§ ±® ¿ ®»¹·±² ®»-·´·»²¬á

Ù´±¾¿´ ½±²²»½¬»¼²»-- -»»² ¿- ´»-- ·³°±®¬¿²¬ ¬¸¿² ±¬¸»® ¯«¿´·¬·»- ¬¸¿¬ ¸»´° ¿² »½±²±³§ ¾±«²½» ¾¿½µ º®±³


Ïæ É»¼ ´·µ» §±«® ª·»© ±² ©¸¿¬ ³¿µ»- ±²» »½±²±³§ ³±®» ®»-·´·»²¬ º±® §±«® ¾«-·²»-- ¹®±©¬¸ ¿²¼ ±°»®¿¬·±²-ò ¤ Þ¿-»æ ìéè ø»¨½´«¼»- •²±¬

¿°°´·½¿¾´»ô ¼±²¬ µ²±©ô ¿²¼ ²± ¿²-©»® ®»-°±²-»-÷Ïæ Ú®±³ ¬¸» º±´´±©·²¹ ´·-¬ô °´»¿-» -»´»½¬ ¬¸» ¬±° í ßÐÛÝ »½±²±³·»- ©¸·½¸ §±« ½±²-·¼»® ¬± ¾» ¬¸» ¾»-¬ °®»°¿®»¼ ¬± ½¿°·¬¿´·-» ±² ½¸¿²¹»

¿²¼ ñ ±® ¾±«²½» ¾¿½µ º®±³ ¼·-®«°¬·±² Þ¿-»æ ìéè ø»¨½´«¼»- ²±¬ ¿°°´·½¿¾´»ô ¼±²¬ µ²±©ô ¿²¼

²± ¿²-©»® ®»-°±²-»-÷



© 2013 PricewaterhouseCoopers LLP, a Delaware limited liabilit y partnership. All rights reserved. PwC refers to the United States member firm, and may sometimes refer to the PwC network. Each member fi rm is aseparate legal entity. Please see www.pwc.com/structure for further details.

www.pwc.com/us/apec/2013

Source: PwC 2013 APEC CEO Survey; 2012 APEC CEO Survey

Q: Considering your organisation’s investments in APEC economies over the next 12 months, are you planning on…? | Base: 478 (excludes ‘don't know’ and ‘no answer’ responses)Q: How confident are you about your organisation’s prospects for revenue growth… Over the next 12 months? Over the next 3−5 years? | Base: 2013: 478; 2012: 356

52%54%

42%

36%

3%Decreasing investments

Increasing investments

68%

26%Investments stay

the same

Most CEOs increasing investments in Asia Pacific operationsIn 2013, more are confident in revenue growth prospects over the next year.

Towards resilience and growth: Asia Pacific business in transition





Note: An overall rank was scored from responses ranked in order from economy with most increased investment.Source: PwC 2013 APEC CEO Survey

Q: Please select the top 5 APEC economies where your organisation is increasing investments over the next 3−5 years. | Base: 443 (excludes ‘none of the above’and ‘not answered’ responses)

10 Australia

10Japan

12 Viet Nam

13US

13Thailand

14Malaysia

15Singapore

15Hong Kong,China

22Indonesia

31China

Investment destinations for

rest-of-APEC economy CEOs

10Mexico

13Singapore

14Canada

14Japan

15Hong Kong,China

15Indonesia

26New Zealand

29 Australia

35US

35China

Investment destinations for

mature APEC* economy CEOs*Mature APEC: CEOs with ‘primaryresponsibilities’ for operations in Australia,Canada, Japan, New Zealand, US

Asia Pacific: Where are CEOs increasing investments?Investments are selective as businesses tune allocations for domestic-market growth potential overthe next 3–5 years.






Source: Oxford Economics; PwC analysis

-6.1%

6%5.6%

Chile

-7.7%

6.6%6.8%

ThePhilippines

-5.2%

5.8%6.3%

Peru

-6.6%

8.4%7.8%

China

-11%

7.7%

5.6%

Malaysia

Exports % GDP

Consumption

GDP

Decoupling from export-led growth in Asia PacificResilience must come from within.






Source: PwC 2013 APEC CEO Survey

Q: Thinking of those APEC economies where your organisation is increasing investment over the next 12 months, what proportion will be allocated to the following areas? | Base: 443Q: Expanding middle-income consumption across much of Asia Pacific is expected to increasingly drive future economic growth for the region. To what extent is this trend influencingyour organisation’s growth strategies for the region? | Base: 478 (excludes ‘not applicable,’ ‘don't know,’ and ‘no answer’ responses)

3.8%

Access raw materials /components

5.4%

Create infrastructurepartnerships

6.9%

Access and developtechnology

11%

Expand manufacturing /assembly capacity

11%

Access anddevelop talent

19%

Acquire assets /operations

19%

Expand services /distribution capacity

24%

Develop new productor service

87% of CEOs saymiddle-income consumersinfluence their growthstrategies.

44% to great extent43% to some extent

Middle-income consumers in Asia Pacific driving newbusiness investmentThe promise of business growth from rising middle-income consumers has been clear for a decade.Now businesses are actively investing for a future of domestic consumption-driven growth in Asia Pacific.






Source: Oxford Economics; PwC analysis

8.8%

China

6.3%

The Philippines

5.5%

Chile

3.8%

APECExcluding BruneiDarussalam, PapuaNew Guinea,and Peru

3.7%

World

Services sectors projected to benefit as Asia Pacific incomes rise






Source: PwC 2013 APEC CEO Survey Q: To what extent are you making, or will make, changes in the following areas to capitalise on this development (expanding middle-income consumption across much of AsiaPacific)? | Base: 412, CEOs who cite middle-income influence on growth strategy (excludes ‘not applicable,’ ‘don't know,’ and ‘no answer’ responses)

37%31%

9%

R&D located inthese markets

35%34%

14%

Acquisition strategies

34%38%

14%

Partnerships withglobal companies toexpand in thesemarkets

26%

41%

15%

Sourcing / supplychain

25%

43%

21%

Partnerships withlocal companies toexpand in thesemarkets

19%

41%

25%

Distribution network

16%

48%

24%

Customer service forthese markets

14%

54%

21%

Investment / capitalspending

17%

48%

24%

Approaches tomarketing / brand

12%

48%

29%

Product / services mixto address specificneeds

No changeModerate changeSignificant changeWhere CEOs are changing strategies the most

Asia Pacific CEOs change strategies to sync with new consumersPutting middle-income demand at the centre of business expansion strategies will likely lead to differentdistribution channels, new partnerships, and more innovation.






Source: PwC 2013 APEC CEO Survey Q: To what degree are the following areas of your organisation prepared to adjust to capitalise on the rise in middle-income consumers in Asia Pacific? | Base: 397, CEOs who citemiddle-income influence on growth strategy (excludes ‘not applicable,’ ‘don't know,’ and ‘no answer’ responses)

12%

57%

16%

Procurement /sourcing

11%

60%

20%

Customer engagement /services

10%

61%

21%

Marketing / brandmanagement

13%

54%

20%

Executive suite

11%

59%

22%

Sales

13%

52%

24%

Board of directors

9%

55%

26%

Finance

20%

55%

15%

Government / traderelations

19%

49%

15%

R&D

17%

63%

14%

Human resources

Not preparedWell prepared Somewhat preparedHow prepared is the organisation?

Stress points in R&D and HR as CEOs pivot for consumer demand As CEOs orient for relevance in a changing Asia Pacific, R&D and HR are seen as among the least prepared.







Q: Please indicate where your organisation is experiencing skills shortages in the APEC region. | Base: 334, CEOs who cite skills shortages as a barrier to business growth

21%

4% 6%

2%

17%

1%

19%

7%

49%

21%

41%

7%

52%

16%

57%

12%

39%

7%

Significant shortages Some shortagesWhere skills are in short supply

Where’s the real talent crunch in Asia Pacific?Biggest need for technical, managerial skills, and executives as CEOs set growth plans for the region.







Q: Thinking about opportunities in the digital economy, is your organisation active or planning to be active in…? | Base: 478 (includes ‘not applicable,’ ‘don't know,’and ‘no answer’ responses)Q: Select the option that best describes your organisation’s role as a services provider and / or major customer in the following emerging mobile services markets. | Base: Majorcustomer: 133 (excludes ‘other’ response); Services provider: 218 (excludes ‘other’ response)

17% 21%

Health servicese.g., remote monitoring

32%22%

Education servicese.g., remote learning

32%12%

Media and entertainment

44%

19%

Legal and professionalservices

46% 44%

Financial servicese.g., mobile payments

53% 46%

Mobile−enabled salesservices

Services providerMajor customer

22%CEOs active indeveloping mobileproducts andservices

One in five Asia Pacific CEOs are pursuing mobile productsand / or servicesMobile sales and payments are chief pathways to digital growth.







Q: Do you consider each of the following to be chiefly an opportunity or a barrier for your organisation to benefit from the digital economy? | Base: 478 (excludes ‘neither / nor,’‘don't know,’ and ‘no answer’ responses)

6%

6%

39%

18%

My organisation’s culture

21%

13% 17%

6%

Cyber-security

4%

3%

47%

15%

Integrating with suppliers andother partners

11%

9%

35%

15%

Existing IT infrastructure

6%

3%

39%

9%

Integrating and managingdigital channels

15%

12% 19%

4%

Current legal framework forcross-border data flows

18%9%

17%

5%

Current customer privacyprotections / standards

Emerging opportunityExisting opportunityExist ing barrier Emerging barrier

Uncertainties around standards for data sharing slowingdigital expansionOpportunities centre around connecting more closely within the company and with partners.






Source: eMarketer (2013−2017 projected), based on survey and traffic data from research firms and regulatory agencies, historical trends, company−specific data, andcountry−specific factors

59%

11%

Russia

43%

16%

China

44%

7.8%

Mexico

70%

15%

Japan

74%

38%

Korea

64%

30%

US

2017 (projected)2011Smartphone user penetration as a percentage of population in select APEC economiesIndividuals of any age who own at least one smartphone and use the smartphone(s) at least once per month

Smartphone penetration: The number to watch in mobile innovationWhat happens as smartphone use hits critical mass? Mobile disruption in the form of new businessmodels in health, automotive, and more.







Q: To what extent is your organisation pursuing business relationships in the following areas, because they are important to your organisation’s growth over the next 3−5 years?—Private-public infrastructure models | Base: 478 (excludes ‘not applicable,’ ‘don't know,’ and ‘no answer’ responses)

Q: Do you consider each of the following to be chiefly an opportunity or a barrier for your organisation to benefit from the digital economy?—Existing IT infrastructure | Base: 478(excludes ‘neither / nor,’ ‘don't know,’ and ‘no answer’ responses)

49%of CEOs believe pursuing

private-public infrastructure

models in Asia Pacific areimportant for growth for

their companies over thenext 3−5 years.

20%of CEOs say existing IT

infrastructures are a barrieror emerging barrier tobusiness growth.

Open to new ways of investing and developing infrastructure Asia Pacific has a great need for direct investment into infrastructure. Public financing alone likely cannotmeet the demand.






Source: Economist Intelligence Unit, based on research from World Bank, McKinsey Global Institute; PwC estimates

$193

Projected infrastructure spend

$343

Projected infrastructure need

Indonesia’s infrastructure funding requirements (2013−2017)In US$ billions

2.6%US

2.7%The Philippines

3.2%Indonesia

5%Japan

8.5%China

10% Viet Nam

3.8%World

Infrastructure investment as a percentage of GDP (latest data available)

Room to invest in infrastructure in Asia PacificInfrastructure development is needed to support rising prosperity.







Q: To what degree would further development in the following infrastructure categories in the APEC region create growth opportunities for your organisation? | Base: 478 (excludes‘not applicable,’ ‘don't know,’ and ‘no answer’ responses)Q: To what degree would further investment in the following infrastructure categories create growth opportunities for your principal economy? | Base: 478 (excludes ‘not applicable,’‘don't know,’ and ‘no answer’ responses)

27%

16%

Water supply and treatment

31%

16%

Links from established centresto developing centres

35%

26%

Financial infrastructure

35%

21%

Social infrastructurehealthcare

40%

19%

Social infrastructureeducation

40%

27%

Energy

41%

32%

Regulatory and legalinfrastructure

42%

31%

Trade infrastructure

44%

26%

Information andcommunication tech grid

44%

26%

Transport networks inurban areas

Further investment would create significant growth opportunities for principal economy

Further development in the APEC region would create significant growth opportunities for company

Where is infrastructure needed most?CEOs believe changes to regulatory and trade infrastructures are most crucial for business. When it comes to their economies, developing the tech grids and urban transport are the paths to growth.







Q: How likely or unlikely would your organisation be to invest more in the APEC region if the following regulations or standards were harmonised across the region? | Base: 478(excludes ‘not applicable,’ ‘don't know,’ and ‘no answer’ responses)Q: And of these, where is the goal of uniform standards or regulations across the region most important to your organisation’s growth prospects, if at all? | Base: 478 (excludes‘not applicable,’ ‘don't know,’ and ‘no answer’ responses)

4%

9%

Labour / employeerights

3%

11%

Consumer protectionand labelling

6%

14%

Environmental

3%

16%

Data security /privacy

12%

16%

Product certificationand safety

13%

19%

Tax / accounting

18%20%

Services regulations /

restrictions

16%

22%

Intellectual property

protection

13%

22%

Corporate

governance

Most important to organisation’s growth prospects

Highly likely to invest more in the APEC region if the following regulations or standards were harmonised across the region

What’s holding back more business investment in Asia Pacific economies?Regulatory consistency could unleash more investment in the region. Corporate governance, intellectualproperty protection, and services top the list.







Q: To what extent do you agree or disagree… Multiple regional trade tracks are creating more growth opportunities for our organisation in Asia Pacific? Multiple regional trade tracksare creating more uncertainty or administrative costs for our organisation in Asia Pacific? Multiple regional trade tracks will likely converge in a single Free Trade Area of the AsiaPacific? | Base: 478 (excludes ‘not applicable,’ and ‘no answer’ responses)

Multiple regional trade tracks will likelyconverge in a single Free Trade Areaof the Asia Pacific.

19%

9%

24%

42%

But not yet clear how trade

tracks will evolve

Multiple regional trade tracks are creatingmore uncertainty or administrative costsfor our organisation in Asia Pacific.

26%

8%

35%

22%

…Uncertainty or administrative

costs for our organisation in

Asia Pacific

Multiple regional trade tracks are creatingmore growth opportunities for ourorganisation in Asia Pacific.

14%

6%6%

69%

…Growth opportunities

for our organisation

in Asia Pacific

Multiple regional trade tracks are creating more…

Neither / norDon’t knowDisagree Agree

CEOs welcome momentum on Asia Pacific’s many evolving tradenegotiation tracksEven as one in five believe costs, complexity for their business are rising as a result.






Source: The data included is based on studies in ‘The Trans-Pacific Partnership and Asia-Pacific Integration: A Quantitative Assessment’ by Peter A. Petri, Michael G. Plummer, andFan Zhai, Peterson Institute for International Economics, ‘Policy Analyses in International Economics No. 98,’ November 2012. Please note that the authors amended the study to addJapan and Korea as signatories in the following addendum: ‘Adding Japan and Korea to the TPP’ by Peter A. Petri, Michael G. Plummer, and Fan Zhai. http: //www.asiapacifictrade.org

6.3%

Chinese Taipei

8.9%

Malaysia

9.3%

Russia

20.9%

Hong Kong,China

21.5%

Viet Nam

Free Trade Area of the Asia-Pacific Track

The FTAAP includes various bilateral trade pactsamong all 21 APEC members

1.7%

The Philippines

1.8%

Thailand

1.9%

Malaysia

4%

Viet Nam

10.5%

Hong Kong,China

Asian Track

This path assumes Regional ComprehensiveEconomic Partnership is successfully implemented;RCEP includes 10 ASEAN nations plus Australia,China, India, Japan, New Zealand, and Korea

1.9%

Singapore

2%

New Zealand

2%

Japan

5.6%

Malaysia

10.5%

Viet Nam

Trans-Pacific Partnership 12 Track

This path assumes TPP is successfully implemented

with the following 12 economies: Australia, BruneiDarussalam, Canada, Chile, Japan, Malaysia,Mexico, New Zealand, Peru, Singapore, US, and Viet Nam

Who benefits? Asia’s potential trade pathsGDP percentage gains by 2025 above ‘business-as-usual’ baseline depending on the implementation ofproposed trade paths.







Q: We’d like your view on what makes one economy more resilient for your business growth and operations. | Base: 478 (excludes ‘not applicable,’ ‘don't know,’and ‘no answer’ responses)Q: From the following list, please select the top 3 APEC economies which you consider to be the best prepared to capitalise on change and / or bounce back from disruptionover the next 3−5 years. | Base: 478 (excludes ‘not applicable,’ ‘don't know,’ and ‘no answer’ responses)

Three models of resiliency

Economies CEOs think are best preparedto handle change

45

Globalconnectedness

55

Workforce / cultureadaptability

61

Leadership—public & private

65

Businessadaptability

70

Regulatoryenvironment

80

Macroeconomicstability

Mean ranked score of resilience qualities

What makes an economy or a region resilient?Global connectedness seen as less important than other qualities that help an economy bounce back fromdisruption. Macroeconomic stability and regulatory consistency matter most for CEOs in Asia Pacific.


3Singapore

2US

1China





Note: CEOs were asked to select from a list of 35 Asia Pacific economies, which included 21 APEC economies and those seeking APEC membership, as well as others. Businessleaders whose primary responsibility is Indonesia represent 12% of the total respondent pool. While many in this subset did indeed ‘vote’ for Indonesia, some also chose Myanmar,Macau, Mexico, or Viet Nam as the ‘dark horse’ most likely to surprise.


Q: Which of the following Asia Pacific economies do you believe will be the ‘dark horse’ in the next 3–5 years? | Base: 478 (excludes ‘none of the above’ and ‘no answer’ responses)

3%Malaysia, Japan,

Russia

‘More positive upsidesurprise in (Japan’s) policydirection.’

3%Colombia

‘This country has sensiblepolitics and economicagendas and is poised forrapid gains.’

4%US

‘The raw materials they sodesperately need tocompete are right undertheir nose.’

5%India

‘Growing economy, risingliving standards, increasingmiddle-class wealth,increasing exports,education focus,technology developments.’

7% Viet Nam

‘The next round of growthwill be more significantpending Vietnameseparticipation in the Trans-Pacific Partnership.’

7%The Philippines

‘Transparency in businesstransformation and much-improved corporategovernance.’

8%China

‘High productivity,competitive productioncosts, growingtechnological mastery.’

11%Myanmar

‘The economy will open upmuch more quickly thanmany are anticipating.’

19%Indonesia

‘Skilled labour force, growingresource-based economicactivity, consolidation ofdemocracy.’

We asked 478 business leaders with operations in Asia Pacific toshare their ‘dark horse’—that is, to tell us about the one economy inthe region they believe could surprise with more opportunity than iscurrently expected. Indonesia leads the pack, but many others wereoffered. This is a sample of what they said. To find more of their views on favourable trends in a wider range of Asia Pacific

economies, please go to: www.pwc.com/us/en/apec-ceo-summit

Sifting for future business opportunities can be a complex exercisein a region as diverse as Asia Pacific, which in this report spans toeconomies on either side of the Pacific Ocean. Expanding middleclasses were an obvious attraction; ample natural resources drewothers. But these aren’t the only qualities that can set the stage forbusiness investment. Increasing transparency; youthful populations;

relative wage costs; infrastructure plans; and political stability werefrequently cited as important qualities that create ‘room to grow.’

Trends that favour future investment Asia Pacific economies that CEOs believe could surprise and why.




What is holding back

business investment in

Asia? And what can be done

to remove these obstacles?

2013

www.pwc.com

Foundationsof the future



1. Introduction............................................................ 1

2. The quantity and quality of business investment ..... 2

3. Attracting and repelling investors ........................... 6

4. Infrastructure frustrations ...................................... 8

5. Noodle bowl indigestion ....................................... 12

6. Conclusion ............................................................ 15

Contents

About the report

‘Foundations of the future’ is a report prepared for the APEC Business Advisory Council (ABAC) by

PwC in its capacity as the Knowledge Partner of the APEC CEO Summit 2013.This report explores

some of the major impediments faced by businesses investing in the Asia Pacic region,

particularly around infrastructure. It examines the central role governments can play in easing

these barriers and facilitate the freer ow of capital for economic growth.

The report’s content draws upon the views and insights of CEOs and business leaders with

operations spanning Asia Pacic. PwC developed this report with the support of the Economist

Intelligence Unit (EIU) who conducted research and in-depth interviews for this paper.

We would like to thank all interviewees for their time and insights.

September 2013

Interviewees, in alphabetical order:

Johan Bastin, CEO, CapAsia

Michael Deegan, national infrastructure coordinator, Australian Government

Paul Graham, CEO, Asia Pacic, Middle East and Africa, DHL Supply Chain

Benoit Henry, CEO, Asia Pacic, commercial tyres, Continental

Lars Rasmussen, CEO, Asia Pacic, Moog

Mark Rathbone, APAC leader, capital projects and inf rastructure, P wC

Greg Slater, global head of trade and competition policy, Intel

Siddharth Varma, CEO, Asia Pacic, Yum Restaurants

Tan Sri Dr Francis Yeoh, group MD, YTL



1 Foundations of the future

1. Introduction

1 World Bank national accounts data for 2009, the latest year available

2 In this report “Asia” and “the Asia-Pacific region” refer to the following economies: Australia, Bangladesh, Brunei, Cambodia, China, Hong Kong, India, Indonesia,Japan, Laos, Malaysia, Mongolia, Myanmar, New Zealand, Pakistan, Papua NewGuinea, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Vietnam

The science of understanding how an economy

grows is complex and hotly debated. But one

ingredient that everyone agrees is necessary is

xed capital investment. Unless an economy builds

roads, factories, and schools, it is hard for thateconomy to grow.

Fixed capital investment can come from the

government or the private sector, but in most

countries in Asia it is the latter that contributes the

greatest share. In Thailand, for example, 73% of all

xed capital investment – the sort that goes into

physical assets, like ports and computers and ofce

blocks – comes from private sources. In India, the

gure is 74%, while in the Philippines it is 80%.1

The implications are two-fold. First, governments arenot investing enough in building their nations’ xed

assets and infrastructure. There is a substantial decit

in inherently public sector infrastructure – the type

that doesn’t offer strong returns to the private sector

and often needs government subsidy to be viable. For

example, across the emerging markets in Asia, most

economies lack efcient transports networks, power

supply and distribution, water supply and distribution.

And second, if governments continue to under-

invest, they need to create an environment that

attracts even more investment from the private

sector. Governments must create the right

conditions for businesses to feel condent aboutdeploying their capital in new projects over long

time periods.

Given that much of Asia today has relatively low levels

of income, the region has a pressing need to pursue

rapid economic growth. It needs to attract the

necessary xed-capital investment to support

economic development and rising prosperity. But is

the region doing enough to attract this private capital?

This paper looks at the investment landscape for

private business in the Asia-Pacic region.2

Bytalking to CEOs from a range of sectors, it gathers

opinions about what factors are preventing

businesses from investing. Further, it assesses what

could be changed in order to reduce these barriers

and obstacles. The paper looks at the general

investment climate, and then focuses on two issues

in particular: infrastructure, and the evolving

network of free-trade deals.



Foundations of the future 2

2. The quantity and quality

of business investment Although the picture varies, many countries in the Asia-Pacic

region are already attracting lots of business investment. Asia

is well known for having high rates of saving, and these

savings are being used to invest in assets such as new

infrastructure, houses and factories.

Chart 1: Fixed capital investment as a share of GDP (%), 2012*

*Figures rounded to the nearest tenth.

Source: Economist Intelligence Unit

World

22.2%

Myanmar

16.3%

Pakistan

10.9%

USA

12.7%

New Zealand

18.8%

Philippines

19.4%

Taiwan

19.5%

Cambodia

20.3%

PNG

20.7%

Japan

21.2% 24.1%

Singapore Bangladesh

25.4%

Malaysia

25.7%

Thailand

28.5%

Australia

28.5%

Vietnam

28.2%

South Korea

26.7%

Hong Kong

26.4%

Sri Lanka

28.9%

India

29.9%

Indonesia

33.2%

Laos

29.2%

China

46.1%

Mongolia

48.3%

In 2012, total xed-capital investment (public and private

sector) accounted for 22% of the global economy. In Asia,

most economies had an investment ratio that was above this

global average. In Mongolia, for example, investment made up

almost 50% of the economy, thanks in large part to its mining

boom. (See chart 1.) In China, xed asset investment was 45%

of GDP. (China is a little different from many Asian countries

in that half of this substantial investment comes from the

government and half from the private sector.)




Flirting with foreigners A different window onto the investment picture in Asia comes from looking at

inows of foreign direct investment (FDI). High levels of FDI suggest that a

country is an attractive place for companies to put their money. Chart 2

(below) compares the Asia-Pacic region’s share of the global economy with

its share of global FDI. During the 1990s, the region was attracting FDI in

proportion to its share of the world economy. After the Asian Financial Crisis

of 1997 and 1998 FDI ows dropped markedly, but more recently they have

recovered. In 2012, Asia accounted for 32% of the global economy and 30%

of global FDI.

Chart 2: Global share of gross domestic product andforeign direct investment (%) for Asia

GDP and FDI measured in US$ at market exchange rates


0

5

10

15

20

25

30

35

Asia’s share of global FDI

Asia’s share of global GDP

Emerging economies that are building their

infrastructure, cities and industrial base for the rst

time need to have higher investment ratios thandeveloped economies. While some of emerging Asia is

attracting this needed investment, it is painfully clear

that some countries are not. In Pakistan, for example,

total investment in xed assets only amounts to 12%

of GDP. In Cambodia it is only 20%. Some observers

argue that India, with an investment ratio of 30% of

GDP, won’t achieve its full potential until this is closer

to 35%.

High rates of investment tell only part of the story,

though. As well as the quantity of investment, it is

important to consider its quality. Is the investment

going into the most productive parts of the economy?Is it creating the sort of assets that a country most

needs for its future?

In Indonesia, for example, the headline investment

ratio of 34% of GDP looks impressive. But a lot of this

investment is going into building high-end apartments

and real estate, and very little is going into the

infrastructure that is needed to allow for continued

and sustainable economic growth. For Indonesia to

enjoy high rates of growth in the future, it needs to put

money into transport networks, power stations and

other utilities. In China, commentators have longargued that some of the country’s investment is

creating too much capacity in certain industries such

as steel. In countries like China and Indonesia,

policymakers need to examine why some parts of the

economy are attracting too much investment and

other parts too little.

“High rates of investment tellonly part of the story, though.

As well as the quantity ofinvestment, it is important to

consider its quality.”




While this picture looks reasonable, the region should arguably be

attracting more. Asia is the fastest-growing part of the global economy,

which suggests that foreign businesses should be investing in the region

today in anticipation of all the future growth to come.

Behind the headline gures, it’s clear that some parts of the region are

outperforming in their ability to attract FDI. In particular, the countriesof the Association of South-east Asian Nations (ASEAN) and China are

outperforming. However, other parts, notably Japan and India, are

underperforming. (See charts 3, 4, 5 and 6, below.)

The reasons behind underperformance or outperformance in attracting FDI

vary depending on the country. However, investors clearly favour certain

kinds of investment environment over others, as the next chapter explains.

GDP and FDI measured in US$, at market exchange rates




Chart 3: Global share of gross domestic product andforeign direct investment (%) for China

Chart 4: Global share of gross domestic product and foreign direct

investment (%) for the Association of South-east Asian Nations (ASEAN)

0

2

4

6

8

10

12

14

16

18

China’s share of global FDI

China’s share of global GDP

0

1

2

3

4

5

6

7

8

9

10

ASEAN’s share of global FDI

ASEAN’s share of global GDP




GDP and FDI measured in US$, at market exchange ratesSource: Economist Intelligence Unit



Chart 5: Global share of gross domestic product and

foreign direct investment (%) for Japan

Chart 6: Global share of gross domestic product and

foreign direct investment (%) for India

-5

0

5

10

15

20

Japan's share of global FDI

Japan's share of global GDP

0

0.5

1

1.5

2

2.5

3

India’s share of global FDI

India’s share of global GDP




3. Attracting andrepelling investors

When a company makes an investment in a new market many

factors feed into the decision. Some of these factors are beyond

the reach of policymakers. For example, the size of a domestic

population, the presence of natural resources and the

geographic location are important considerations thatgovernments have little control over.

But many other areas can be addressed. The rst barrier that

companies face is whether they are even allowed to invest. All

countries have some degree of restrictions around foreign

ownership of certain industries. However, Asia has much higher

foreign restrictions than the rest of the world.

Source: World Bank

A study by the World Bank looked at 31 different industrial

sectors and calculated the average ownership allowed by

foreign investors in different countries.3 The nations of East

Asia and the Pacic have signicantly higher restrictions than

everywhere else in the globe. (See chart 7, below.) The samereport also shows that 50% of all countries in East Asia require

foreign rms to obtain approval before making an investment

in light manufacturing. In Latin America and Eastern Europe,

by contrast, not a single country requires such approvals.

Chart 7: Average % ownership of companies

allowed by foreign investors across 31 sectors

3 “Investing across Borders 2010”, World Bank

Eastern Europe & Central Asia

Latin America & Caribbean

High-income OECD

Sub-Saharan Africa

South Asia

East Asia & the Pacific

Middle East & North Africa

94.3%

91.6%

91.2%

90.2%

88.2%

74.4%

83.5%




Assuming that companies are allowed to invest, they then

look at many other factors. The quality of macroeconomic

management is important. Investors prefer countries with a

stable currency, low ination and steady GDP growth, and

they are put off by too much volatility. The political system

must be equally stable. Just as important are the supply of

workers with the right skills, the presence of good

infrastructure, the character of the regulatory environment,

the reliability of the legal system and the level of transparency

in the market.

“Like most companies, when we think about a location for anew investment, we have a set of screens,” says Greg Slater,

global director of trade and competition policy at Intel, a US

semiconductor manufacturer. “One of the most important

screens is the availability of the right sort of workers. A lot of

countries are rejected because the human capital isn’t right.”

At Moog, a US engineering group that makes motors and

motion control devices, the most important screen is economic

stability. “In order to invest, we have to be sure that the

economy is being well managed,” says Lars Rasmussen, the

rm’s CEO for the Asia Pacic region. “Our operations in India

this year have been hurt by the falling rupee.” (From January

to July 2013 the rupee fell by more than 11% against the US

dollar.)

Just as important is the protection of intellectual property

(IP). “We are in a position where we don’t want to share our IP

with anybody,” stresses Mr Rasmussen. “That’s part of the

reason why we haven’t invested in manufacturing in China.”

Digging up the playing eld and shifting the goal posts

At Continental, a German automotive and tyre group, the

company’s truck tyre division has also avoided China, but fordifferent reasons. “When we look for places to invest, we have

to feel we can be competitive,” explains Benoit Henry, Asia

Pacic CEO of the truck tyre business. “We look for a level

playing eld for competition.”

In China, Mr Henry feels the playing eld does not allow his

rm to compete effectively. In part, this is because many of his

competitors are state-owned enterprises (SOEs), and as such

they operate with different goals and priorities. “For SOEs,

their primary goal is to create employment, and tyre

manufacturing is very labour-intensive,” explains Mr Henry.

“Making prots for them is a secondary consideration, so they

charge prices that are hard to compete with, while we are acompany that is focused on earning reasonable prots.”

The issue of free and fair competition is not limited only to

China. CEOs report that many parts of Asia operate with

conditions where local companies have considerable

advantages over foreign investors, through both ofcial

regulations and unofcial arrangements of patronage,

cronyism and discrimination. While such conditions support

local companies in the short run, they are likely to harm a

country and its economic development in the long run by

promoting inefciency.

In some cases, the lack of a level playing eld takes on a

different character, whereby companies are forced to invest ifthey want to do business. “Some countries in Asia are creating

conditionality around market access based on locating

investment in those countries,” notes Mr Slater at Intel. “This

is not sensible. It’s not good policy to force companies to

invest. It’s much better to attract them to invest.”

Ruing rules and bemoaning bureaucracy

Gripes around bureaucracy and regulation are also

commonplace among CEOs. If business rules are too onerous

or unclear, if paying taxes is too complicated, and if

governments create unnecessary licensing procedures and

paperwork, then businesses are less likely to invest.

One frustrating form of bureaucracy for many companies

comes from restrictions around what activities they are able to

engage in. Companies that sell industrial equipment, for

example, often want to provide nancial services to their

clients but are prevented from doing so because these

activities are considered the preserve of banks.

DHL Supply Chain, a German-owned logistics business, has

encountered these issues in Indonesia with some of its

pharmaceutical clients. As well as shipping drugs into the

country for these customers, and storing them in its warehouses, DHL wants to provide other services such as

repackaging the drugs with local labels and distributing them

to pharmacies. However, activities such as these are

considered the domain of drug manufacturers, which requires

a different set of operating licenses and requirements for DHL.

“The authorities have very rigid denitions of what sectors

companies can operate in and sometimes that prevents us

from providing some of the services that we would like to

offer,” says Paul Graham, CEO for the Asia Pacic, Middle East

and Africa at DHL Supply Chain.




4. Infrastructure

frustrationsOf all the different types of business investment, arguably the

most important is money that goes into infrastructure. Power,

transport, communications, water and sanitation are the

foundations upon which an economy grows. Unless these

crucial elements are in place, countries are unlikely to attract

any other types of investment – there is no point building a

factory in a country that has no electricity to power the

machines or no roads to transport the goods.

And yet, despite the self-evident importance of infrastructure,

the Asia-Pacic region has been seriously under-investing in

these assets. Economic growth has been running at a faster

speed than new investment in infrastructure, and many parts

of emerging Asia now struggle with gridlocked roads, clogged

ports, unreliable power, and unsafe water. Comparing levels of

infrastructure across the region shows how far behind many

countries are. (See charts 8, 9, 10, and 11, below.)

Chart 8: Electricity production per capital (in kilowatt hours)

Data is for latest available year

Source: Economist Intelligence Unit & CIA World Factbook

USA

AustraliaTaiwan

New Zealand

South Korea

Japan

Malaysia

China

Thailand

Vietnam

Indonesia

India

Philippines

Sri Lanka

Pakistan

Bangladesh

Nepal

Myanmar

Cambodia

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000

Kilowatt hours

Economy




Chart 9: Road per capita (in metres)

Chart 10: Metres of railway per capita



Australia

New Zealand

USA

Japan

Sri Lanka

MalaysiaChina

India

Thailand

Cambodia

South Korea

Philippines

Vietnam

Taiwan

Indonesia

PakistanMyanmar

Nepal

Bangladesh

0

0

5

0.2

10

0.4

15

0.6

20

0.8

Metres

Metres

25

1

30

1.2

35

1.4

40

21.6 1.8

Economy

Australia

New Zealand

USA

Japan

Burma

South Korea

Taiwan

Sri Lanka

China

MalaysiaThailand

India

Cambodia

Pakistan

Vietnam

Indonesia

Bangladesh

Philippines

Nepal

Economy




Chart 11: Population per airport with a paved runway


While these issues are most serious in the emerging economies

of Asia, the developed economies have their own issues too. In

Japan, for example, rebuilding infrastructure after the

Fukushima earthquake and tsunami in 2011 will cost around

US$200bn. And given the country’s reluctance to rely so heavily

on nuclear power in the aftermath of the disaster, even more

investment will be needed in building new sources of

electricity. More generally, Japan built much of itsinfrastructure during the 1960s and ‘70s, and these assets are

starting to age and need upgrading.

The Asia Development Bank estimates that the region needs to

invest between US$8trn and US$9trn in infrastructure between

2010 and 2020. This is the amount of investment needed to

keep the region’s economies growing at current rates. If this

investment doesn’t materialise, the region will not be able to

grow so quickly, thereby slowing the rate at which incomes rise.

“Infrastructure is the elephant in the room in Asia,” says Francis

Yeoh, group MD of YTL, a Malaysian conglomerate with interests

ranging from cement and construction to power, water and

hotels. “In Asia, we need infrastructure to drive our economic

growth, but governments are not doing anything to create the

conditions that will encourage the investment we need.”

Indeed, looking at the level of investment going intoinfrastructure, it’s clear that many parts of Asia are seriously

under-investing. At a global level, investment in infrastructure

is equal to 3.8% of GDP.4 Some countries in Asia are investing at

a higher rate than this, for example Vietnam, where

infrastructure investment is equal to 10% of GDP5, and China,

where it comes to 8.5% of GDP.6 However, many other parts of

the region are investing at a much lower rate than the global

average. In Indonesia, infrastructure investment is equal to just

3.2% of GDP.7 In the Philippines it comes to 2.7% of GDP.8 Given

that these are emerging economies with giant infrastructure

needs, these rates of investment are much too low.

4 McKinsey Global Institute5 World Bank6 McKinsey Global Institute7 World Bank8 World Bank

USA

Economy

Australia

New Zealand

Taiwan

South Korea

Malaysia

Japan

Thailand

Philippines

Indonesia

Myanmar

Sri Lanka

Pakistan

Vietnam

Cambodia

Nepal

China

India

Bangladesh

Population (‘000)

1,0000 2,000 5,000 8,0003,000 6,000 9,0004,000 7,000 10,000 11,000




City capital

So why are Asian economies under-investing in infrastructure?

Might it be a lack of capital? Typically, governments are the

largest contributors to infrastructure investment around the

world. In Asia, some governments do face scal constraints and

lack the money to invest in infrastructure, notably the lower-

income countries such as Indonesia, India, the Philippines,

Cambodia, Myanmar, and Laos. However, while public-sector

capital may be limited in some places, private-sector capital is

certainly not constrained.

“There is a huge amount of capital in the market,” observes

Johan Bastin, CEO of CapAsia, a Singapore-based fund

manager looking to invest in infrastructure projects in Asia.

As well as funds such as Mr Bastin’s, private sector sources of

capital also include pension funds, private equity groups and

banks, as well as operators and constructors of infrastructure

themselves. “In some markets there are issues on debt

nancing for infrastructure because you can’t get long-enoughmaturities,” adds Mr Bastin, “but this is improving.”

Clearly, while public capital may be constrained in certain

countries in Asia, private capital is readily available. So what

is holding back private investors? Why is business so hesitant

to get involved in Asia’s infrastructure opportunities?

One of the primary concerns among investors is a lack of trust in

the regulatory and legal regimes in many countries. At present,

the frameworks that govern infrastructure are obscure,

unreliable, difcult to navigate and constantly changing. As such,

investors do not have condence that their investments will be

safe and well-governed over long time horizons.

“There is nothing more local than infrastructure,” observes Mr

Bastin. “Because everything is local, you need to have trust in the

government and trust in the economy and the market that things

won’t go wrong.” Whereas a manufacturer might be able to

unplug its machines and move to a new country with relative

ease, the owner of a port or a railway has no such option.

In addition to weak regulatory and legal environments,

investors cite many other barriers to investment.

Infrastructure projects in Asia are often poorly prepared, with

insufcient feasibility studies, which in turn leads to unviablecommercial terms being offered to investors. Often the risk

allocation between the public sector and the private sector is

inequitable. For example, governments sometimes expect the

private sector to acquire the land needed for an infrastructure

project, when this is almost always best done by governments,

especially for investments in roads and railways.

It would be simple enough to address this issue if governments

were to look at what is best practice for allocating risk in other

markets and then structure their own projects along similar

lines. However, certain adjustments would still be needed in

terms of the risk/reward prole of these projects. The weakerregulatory and legal environment in many emerging markets

makes them inherently more risky than similar opportunities

in more developed markets. As such, governments must

recognise the need to shoulder a higher level of risk, and

perhaps also recognise the need to boost potential returns

through subsidies, in order to attract global capital.

Building bridges to investors so investors can

build bridges

“What we need in Asia is coherence and transparency. We

need a coherent regulatory regime for infrastructure and

transparent processes,” says Dr Yeoh at YTL. “Countries like

the UK, Australia and Singapore have world-class regulatory

regimes. Everyone competes on a level playing eld, with

guaranteed prices and fair returns for owners and operators of

infrastructure, and guaranteed service levels for consumers

and users of infrastructure. The regulations are perfectly

transparent. There is certainty and clarity, which is what

investors are looking for.”

In contrast, notes Dr Yeoh, some countries in Asia are plagued with cronyism, corruption and nepotism. “Infrastructure does

get built, but the process is slow and inefcient, there is little

competition, and the costs [of building infrastructure] are

much higher,” he says.

Dr Yeoh, and other investors like him, have a wishlist of things

they would like to see improved. For a start, they believe

regulators of infrastructure must be truly independent of

politics. At present, they argue, regulators often come and go

whenever there is a new election, which means the regulators

can’t be relied upon.

Investors call for a deepening of the capabilities of

government departments to procure infrastructure. At

present, projects are put in front of investors with little or no

preparation, such as commissioning feasibility studies or

analysing what sort of prices users will pay to use the

infrastructure, and whether or not government subsidies are

needed to make the projects viable.

Investors want to see more transparency around bidding for

infrastructure projects, with clear processes and well-dened

steps. They want more certainty around how infrastructure

projects will be governed, such as the frequency and character

of pricing reviews by the regulator. An important part of this

certainty is the use of standardised legal contracts, which is

common practice in mature infrastructure markets, but not

yet the case in much of Asia. Investors also want a level

playing eld, where local and foreign capital are treated

equally and the opportunities for corruption are removed.

Many investors also believe that governments must be

prepared to offer longer concessions for infrastructure

projects. Because incomes in many parts of Asia are low the

prices charged to users are also low, which means it can take a

long time to earn a proper return on an investment. At

present, the length of infrastructure concessions is often tooshort to earn a decent return.




5. Noodle bowl

indigestionCross-border investment is tightly linked with

cross-border trade of goods and services. Over the

past ve decades the value of cross-border trade

around the world has risen sharply, fuelled by

progress in reducing barriers to international

business. Between 1950 and 2010 the volume of

global trade grew by an average of 6% a year,

nearly twice the rate of GDP growth.

9 Patterns of Free Trade Areas in Asia,Masahiro Kawai and Ganeshan Wignaraja,East-West Center, 2013

Chart 12: Number of concluded free trade agreements in Asia,

1976 to 2012

Source: East-West Center

Much of this progress was achieved on a multilateral basis under the

General Agreement on Tariffs & Trade (GATT), which ran from 1947 to

1994, and then from 1995 under the World Trade Organisation (WTO),

which replaced GATT. However, while these multilateral agreements

achieved a great deal at rst, progress more recently has ground to a halt.

With 159 member countries in the WTO, all with their own vested

interests, countries have found trying to negotiate a new trading

landscape to be cumbersome, unwieldy and increasingly impossible.

And yet, countries recognise the benets that come from pursuing free

trade and the opportunities it creates for attracting foreign investment.

As such, many nations have turned away from multilateral trade

negotiations and have focused instead on arrangements that are easier to

set up, notably bilateral trade deals between two countries, or else

regional deals between a handful of neighbours.

Asia has responded eagerly to this new trade landscape. In 2001 the

region had set up only ve free trade agreements (FTAs), including the

ASEAN Free Trade Area, which was established in 1991. However, by

2012 that number had risen to 71. (See chart 12, below.) A further 84

FTAs are in negotiation by Asian nations.9




While these smaller-scale trade deals undoubtedly

reduce the barriers to cross-border investment, they

also create headaches. One of the biggest issues is

complexity. When countries operate with one global

set of trade rules, understanding them is relatively

easy. But when a picture emerges like that in Asia,

often dubbed “a noodle bowl”, then many rms,

especially smaller ones, struggle to understand what is

allowed and how they should respond.

“The proliferation of trade deals makes it difcult

for companies to keep up with what is going on,”says Mr Graham at DHL Supply Chain. “We need a

real commitment to harmonise trade agreements at

an APAC level, but progress doesn’t seem to be

happening fast enough.”

Given that costs are rising rapidly in Asia,

especially those for labour, Mr Graham believes

that reducing the friction of cross-border trade is

one way that Asia can stay competitive against

emerging centres of manufacturing in other places

such as Africa. Friction comes not only from trade

barriers and the complexity of trade agreements,

but also from inefcient customs.

“Customs procedures are still challenging in much of

Asia and are hampering regional connectivity,” notes

Mr Graham. “Even shipping goods from Malaysia to

Singapore can take 14 hours to clear customs for a

20-minute drive.” Elsewhere in the region, Mr Graham

notes that customs documentation is still highly

bureaucratic and paper-based. “The processes

involved in shipping goods across borders open up

opportunities for middle men to get involved, which

adds cost and complexity.”

Cross-border? Furious-border?

The proliferation of trade deals isn’t the only issue that CEOs nd

frustrating. Just as signicant is the fact that many of the FTAs being

negotiated today are backward-looking and designed for an obsolete

model of business. In particular, they fail to recognise the dramatic

fragmentation of supply chains in recent decades.

In the past, manufacturing of a particular product was largely done from

start to nish in just one country, with the nished products then shipped

across borders. Free-trade deals were designed around this view of

manufacturing and concentrated on the treatment of nished goods.

But these days, thanks to improvements in information and

communications technologies, manufacturing processes have been

broken up into ever smaller, more discrete parts, with each individual

process in the manufacturing chain located in the country where it can

be done most cost-effectively. The result is that the share of nished

goods in cross-border trade has fallen markedly, whereas the share of

parts and components has risen sharply. (See chart 13, below.)

Chart 13: The import content of exports (%)

Source: World Economic Forum

1995

USA

India

Brazil

Indonesia

Chile

France

Turkey

9%

11%

11.5%

15.5%

19%

19.5%

14%

13%

13.5%

14%

18%

22%

26%

22.5%

20%

16%

23%

27%

30%

47%

27%

28%

29%

34%

38%

56%

Germany

China

Italy

Spain

S Korea

Hungary

2005




The old generation of FTAs is not equipped to deal with this

new situation. For a start, components might ow across

multiple borders during the manufacturing chain before they

reach their nal market. While tariffs have come down

sharply over the past few years, they still add up if incurred

every time a part crosses a border during the production

process. Another issue concerns so-called “rules of origin”

(ROO). These are the regulations that govern where a product

was made, and thereby whether it is subject to tariffs, quotas

and the like. Given that products these days are made from

parts sourced from all over the globe, understanding and

interpreting ROO has become extremely challenging.

Losing the service game

Another issue that needs addressing with FTAs is the cross-

border provision of services. Most trade deals today are

heavily focused on products and tend to ignore services. Yet

services make up an ever growing piece of the global

economy. In high-income countries, services account for 73%

of GDP; in middle-income countries, they make up 53% of the

economy; and in low-income countries they represent 45% of

economic activity.10 As countries in Asia get richer, they will

nd the need to liberalise services ever more pressing.

This is especially true given that services are increasingly

tradeable across borders. Thanks to new IT and communication

technologies, companies can increasingly set up global value

chains in services industries. Product design, logistics services,

nance, telecommunications, business process outsourcing, IT

system management and many other types of activity are being

organised on an international basis. Unless countries start to open

their borders to cross-border service provision, they risk losing out

on a growing ow of investment dollars that is building these

global service industries.

10 “Investing across Borders 2010”, World Bank

One of the barriers standing in the way of cross-border

services (and hence blocking cross-border business

investment) are rules around data ows, and what sort of

information is permitted to be sent from one country to

another. “Most FTAs today do not have robust e-commerce

provisions,” notes Mr Slater at Intel.

His company, for example, has 10,000 suppliers and hundreds

of customers all over the globe, not to mention countless

internal divisions within Intel itself. All these various entities

need to communicate with each other, sending contracts,

orders and information that are the lifeblood of the company.

“Cross-border data ows are critical to any global company

these days. We want to be able to run our company on a truly

global basis without having to incur taxes on the goods and

services that make up our value chain, or having to put certain

functions in certain places,” says Mr Slater. “We need trade

deals that address issues such as trade-secret protection,

encryption and cross-border data ows. We need trade deals

that keep pace with the changing character of globalisation

and the changing character of technology.”

One ray of light, he adds, could be the Trans Pacic

Partnership, a trade deal being negotiated between 12

countries around the Pacic Ocean, including the United

States. The TPP, argues Mr Slater, is a truly forward-looking

trade deal that promises to address many of the shortcomings

of current FTAs. That’s good news for business. But unless and

until other governments can adopt a similar approach they

will be restricting the ability of companies to invest in the best

way possible.




6. Conclusion

No country has the perfect investment conditions. Companies will always

nd something that could be improved. But when it comes to attracting

business investment, many countries in Asia are still not getting even the

basics right, like providing reliable electricity, let alone tackling harder

issues such as crafting trade rules for cross-border e-commerce.

Perhaps some parts of the region feel that they do not need to try. After

all, Asia is the fastest-growing part of the global economy. Global

businesses want to be in the region to position themselves for rising

wealth and opportunity. Perhaps some countries feel that businesses willinvest come what may.

But such a view would be mistaken, for Asia’s future will certainly be

more challenging than its recent past. Regional growth in the 2000s was

driven by strong demand for Asia’s exports in Europe and the US, where

consumer spending was fuelled by rising debt. Following the nancial

crisis, that debt-engine in the West has stalled and Asia has relied much

more on domestic demand for its growth. And yet, much of the domestic

demand within Asia has also been fuelled by debt. Some of the debt has

grown up on the back of hot capital inows from the West where central

banks have been ooding their economies with cheap money. But more

signicantly, Asia itself has been running loose monetary policy,especially in China.

These ultra-supportive conditions are unlikely to last – either in the West

or in Asia – and the region will have to work harder for its growth in

future. The competition to attract business investment will increase –

both regionally and globally. Those countries that can compete most

effectively in attracting investment will have the greatest protection

against an uncertain future.



Foundations of the future 16 11 Adapted from ADB/ADBI (2009) and Bhattacharyay (2010)

The PwC Perspective:

The governments of emerging economies across Asia need to recognise that each is competing with the other for necessary

capital (nancial and human) from the private sector. This capital will ow to the projects and markets that are most attractive

to the investor – risk prole, return, ease of doing business, security of investment.

The graphic below illustrates the extent of infrastructure needs across Asia. It also highlights the sources of potential capital

available for investment and the barriers inhibiting this investment from owing into critical infrastructure.

As a starting point, regional governments need to address the

basic barriers to investment that are highlighted within this

paper. Spending more time and attention affecting pragmatic

change to legal and regulatory frameworks, preparing

implementable projects and recognising the need to structure

commercially viable opportunities will allow an easier ow of

much needed capital into Asia’s weak infrastructure stock.

In parallel, governments should seek to implement broader

policy initiatives that will improve the attractiveness of an

economy to investors:

• Harmonisation of free trade agreements with a shift

towards multilateral agreements and away from bilateral

agreements. In conjunction with this, existing agreements

should be updated to better reect the contribution of

services to GDP growth;

• Incentivise and prioritise the development of foundational

infrastructure (roads, railways, utilities, airports, etc) which

will unlock and spur growth in other sectors of the

economy; and

• Strengthen efforts to unlock private sector capital and

channel this towards the development of critical economic

infrastructure. Governments can do this by working todevelop and facilitate nancial products that are suited to

investment in long-term infrastructure assets.

The actions required by governments in Asia to tackle the

infrastructure decits that they face can seem insurmountable

and indeed are, without doubt, signicant. However, with

clear and committed policymaking, governments will be able

to develop a track record of successful project implementation.

These efforts can only help to build traction among private

sector nanciers, and create the conditions necessary to

reducing critical infrastructure decits and spur faster growth

in the wider economy.

Infrastructure Deficit ofUS$8 trillion (2010-2020)11

Amt(US$ trn)

Total: 8.0

Investment Barrier

• Poor project preparation

• Legal & regulatory framework

• Poorly defined and unstructuredprocurement processes

• Haphazard pipeline management

• Risk allocation and commercialstructure

• Lack of institutional capacity• Imbalance between risk and reward

• Election cycles

• Planning and investment horizons

• FTA frameworks

• Lack of effective co-ordinationacross government ministries/ agencies

• Lack of investment subsidy incertain jurisdictions

Supply of Capital

• Government

• Multi-laterals

• Commercial banks

• Private sector

– Infrastructure funds

– Pension funds

– Strategic investors

• Constructors

• Operators

• Others (eg exportcredit agencies)

Contacts

Mark Rathbone

Asia Pacic Leader,

Capital Projects & Infrastructure, PwC

Tel: +65 6236 4190

Email: [email protected]

Yumiko Noda

PwC Japan, Head of PPP,

Infrastructure and Government

Tel: +81 3 3546 8512


Rizal Satar

PwC Indonesia,

Infrastructure Leader

Tel: +62 21 528 90350


Telecom

PowerWater &

Sanitation 1.1

4.1 0.4 Transport

Rail

0.04

Road

2.3Others

0.09

2.5



www.pwc.comThis content is for general information purposes only, and should not be used as a

substitute for consultation with professional advisors.

© 2013 PricewaterhouseCoopers Limited. All rights reserved. PwC refers to the China

member firm, and may sometimes refer to the PwC network. Each member firm is a

separate legal entity. Please see www.pwc.com/structure for further details.

HK-20130801-3




This is the PwC 2013 APEC CEO Survey .

2013APEC CEO Survey

Research methodology



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Acknowledgements

Advisory group

Wishnu Wardhana

Christopher Albani

Rodger G. Howell

Frank Lyn

Craig Mundie

Eduardo Pedrosa

Yu Ping

Mark Rathbone

Irhoan Tanudiredja

Greg Unsworth

Monica Hardy Whaley

Core editorial team

Project management

Representing APEC CEO Summit 2013

Ricky Sugiarto

Amin Subekti

David Parsons

Allen Lai

Lucien Ong

Design



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PwC 2013 APECCEO Survey

content, please contact:

Cristina Ampil

Cynara Tan

Mike Davies Frances McVeigh

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for their generous logistical support in making

PwC 2013 APEC CEOSurvey a success:



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PwC APEC CEO Survey Towards Resilience & Growth2013

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