Economy in 2013: Unly to Revive

Pessimistic about second half of 2012 According to this study, 46 percent of businesses expressed their pessimism about the time of economic recovery and disbelieved in a revival in 2013. However, 44 percent of enterprises believed in an economic recovery from the second half of 2013. At the same time, some believed in a rebound from the second half of 2012 but the number of optimistic businesses were outnumber by pessimistic ones. However, businesses proved their resilience and readiness to what is deemed the worst as they believe that everything would be still under their control. For the time being, enterprises accepted the fact that their business results would be worsened in the second half of 2012. More companies planned staff cuts and revenue slump than those believing in an increase in the first six months. But, companies forecasting revenue increase outnumbered those anticipating a drop. Notably, 37.74 percent of business managers said the biggest obstacle to corporate restructuring decisions is the shortage of appropriate personnel. Unpredicted economic fluctuations inhibited businesses from making restructuring decisions. The next hurdle is the disagreement of business leaders in restructuring objectives. While credit flows remain a burning issue, enterprises were asked about their opinions on banks’ activities for the sake of the business community. 38 percent of respondents said banks only supported large profit-making businesses while 31 percent said they prioritised supports for close corporate customers. The remainder said banks were still trying to support businesses but they were too weak to do so. Only a few respondents had no sympathy with banks because they did not really want to support businesses and still wanted to gain as much profit as possible. Bail out or let go? In this context, large and growing enterprises continued disagreeing on proposed macroeconomic objectives for the second half of 2012 and first six months of 2013: Bail out troubled businesses or spare efforts for economic reform and restructuring? According to the research, some businesses proposed continued aids for businesses like tax reduction, debt rescheduling, write-offs, increased low-rate credit, and real estate stimulus. Otherwise, a series of companies would go out of business and workers would face unemployment. The society may be in chaos. This is common appeal sent to the National Assembly and the Government by industry associations and businesses, particularly real estate, building material, shipping and automotive industries. The Government had taken measures to support and bail out these enterprises by reducing tax rates, rescheduling debts, writing off debts, allowing standalone businesses to increase prices, and other financial and monetary measures. Some enterprises, especially big private ones, said the Government should focus on economic reform and restructuring. It should not bail out weak businesses and let them go bankrupt, including weak State-owned enterprises. Then, new businesses would be set up and jobs would be created. Bailout would encourage businesses to rely on the Government. Similarly, the decline in housing market is positive for the economy and for people and there was nothing to worry about. Housing stimulus would engender speculative economy, and would repeat the cycle of rapid growth, high inflation, speculation and unfocused investment.