Business Facilities -November 2008

INTERNATIONAL PROFILE Asia By Brian Donahue Asia: A Portrait of Growth Policy reforms, economic shifts and offshoring are boosting emerging Far East economies. A sia has enjoyed unprecedented economic growth in the decade since its financial crisis in the late 1990s. But just how it will weather the current global economic downturn in the coming months and years remains to be seen. While analysts have varying views on the possible effects, it is clear that the economic and legislative progress made by Asian countries of all sizes in recent times has made them stronger and less vulnerable to outside forces. During the past five years, China and India led the way as the world enjoyed continuous economic growth. Asian countries experienced dramatic increases in GDP and per capita income. Their stock markets soared into 2008, with indices in China, Hong Kong, Singapore and South Korea hitting record levels. The emerging markets of South and East Asia reaped the rewards of stronger currencies, current-account surpluses, high currency reserves, strong domestic spending and increased trade with other developing nations and the European Union. A shining example of that success has been Singapore, which over the course of a single generation rose from a vulnerable business climate to a prosperous and globally powerful economy. Singapore has led the world on the overall regulatory ease of doing business for three straight years, followed by New Zealand, the U.S. and Hong Kong, according to 32 NOVEMBER 2008 the International Finance Corporation’s “Doing Business 2009” report. The report also gives high marks to Thailand and Malaysia for reforms made in the past two years. Thailand made paying taxes easier by reducing fees and facilitating online payments; and exempted companies with taxable income under $1.2 million baht from corporate income tax. It also amended its Securities and Exchange Act to strengthen minority shareholder rights. Malaysia abolished the real property gains tax and reduced the corporate income tax rate to 26 percent. A further reduction is planned for next year. Reforms there also brought a single-tier tax system in which profits are taxed only after dividend payments are exempted. “Countries in the region [East Asia] are clearly committed to reform agendas,” says Dahlia Khalifa, co- author of the report. “Regardless of their stage of economic development, they are recognizing the role that regulatory reform can play in staying competitive while boosting entrepreneurship and job creation.” While many countries have made reforms, their impacts depend on the type of business and a particular corporate or investment strategy, says Keith W. Rabin, president of KWR International Inc., a New York-based consulting firm focused on maximizing the success of Asia-oriented trade, investment and business development efforts for businesses and governments. Most important, Rabin says, is for businesses and investors to recognize the trend toward intra-regional growth and trade in the region. “This differs from the past when the focus was more on discrete export growth to the U.S. and Europe, and Batam is a fast-growing part of Indonesia. PHOTO CREDIT: KWR INTERNATIONAL, INC.

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Business Facilities -November 2008 Contents First Word Sanpshots Corporate Moves: Utah Kodak Develops a Megasite in Upstate New York Anatomy of a Deal: Studley Finds a New Space for Myspace Metro Spotlight: Johnson City, TN A Renaissance of Growth in Medical Plastics The Lone Star State Flexes Its Muscles Asia: A Portrait of Growth Sky's the Limit for High-tech in Arizona Corporate Moves: Pennsylvania Ohio Leads the Way Alabama's Tide Rolls to the Future IEDC 2008 Award Winners Advertiser Index Introducing Navigator Livexchange

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