Firms Confident About Asia, Survey Says

Long-term confidence in the economy of East and Southeast Asia remains strong, despite the region’s financial crisis, a U.N. survey of nearly 200 multinational corporations released Wednesday concluded.

Sixty-two percent of the companies polled plan no changes in direct investment in Asia this year, despite the currency turmoil, the survey found. And 26% plan to increase investment.

“They assume the current financial crisis is short-lived; that is the overall lesson of this,” said Georg Kell, a U.N. economist. “The region continues to be viewed as one of the great markets of the 21st century.”

Kell said the survey probably also represents an endorsement of the International Monetary Fund strictures imposed on countries embroiled in the crisis and confidence that the mandated reforms will for the most part be carried out.

The survey did not, however, try to measure investment plans on a country-by-country basis, instead addressing the region as a whole.

The U.N. Conference on Trade and Development and the International Chamber of Commerce contacted 500 leading multinationals and received responses from 198. Kell said the companies represented a wide cross-section of the economy and are based around the world.

The survey also asked for an assessment of long-term prospects in the region. Eighty-one percent said their assessment was unchanged, and 13% expressed increased confidence in the region.

“This is a resounding vote of confidence in the economic fundamentals of East and Southeast Asia and the region’s long-term prospects,” the International Chamber of Commerce’s secretary-general, Maria Livanos Cattaui, said in Geneva.

U.N. economists noted that downturns in bank lending and Asian stock markets reflect concerns about short-term profits, and corporate direct investment is more closely tied to long-range assessments. They added that the corporations that signaled retrenchment are for the most part dependent on immediate consumer sales in Asia.

Overall, corporations based in Japan and emerging Asian markets showed the same determination to continue investment as did companies based in North America, the poll indicated.