India, China most optimistic about economic recovery: EIU

Executives in India and China are the most optimistic about sustainability of economic recovery, with six out of ten people reposing their faith on the turnaround in the economy, says a survey.

"Companies in Asia are ambivalent about the apparent economic recovery and India and China are the bright spots, where six out of ten believe the recovery underway in their country is sustainable," the Economist Intelligence Unit said in a report.

Across Asia, about one-third of respondents believe they are seeing a sustainable rebound in their country. A sizable 27 per cent do not even think there is a recovery, as per the report titled 'From hindsight to foresight: Improving business transparency in the wake of the financial crisis'.

However, Japanese executives were the most pessimistic, as 44 per cent of respondents there have an opinion that the recovery will falter, while another 44 per cent say there is no recovery in the country at all.

The survey was conducted across 258 senior executives from Asia, in the months of June and July 2009.

Faced with the ripples of the global economic downturn, executives in Asia are focusing towards streamlining their internal operations in order rather than investing in new markets or hiring new staff.

"Businesses should aim to take advantage of the downturn by acquiring quality talent and assets, improving focus on innovation, reinventing business models and looking for new markets," Economist Intelligence Unit director of research Manoj Vohra said.

Half of the respondents said that their priority would be to streamline existing operations and systems, only 24 per cent are willing to hire new staff and only 31 per cent of respondents are likely to make an acquisition over the next 12 months.

The survey further said that a majority of respondents are optimistic that the changes they are making now would result in big gains when the recession ends.

Seven out of ten respondents see a rise in revenues, 63 per cent predict improvements in operational efficiency, and 59 per cent expect increased market share.

They also believe that the various initiatives will improve risk management capabilities (55 per cent) and transparency and reporting (54 per cent), the report said.