CEOs more positive about global government coordination to stabilize
financial systems: PwC survey

More effective government collaboration sought after by businesses

TORONTO, Feb. 2 /CNW/ - As business confidence begins to recover, the unprecedented global coordination by governments last year to stabilize the financial system has drawn praise from business according to the 13th Annual Global CEO Survey from PricewaterhouseCoopers (PwC) and its Public Sector Research Centre report Rethinking and Reshaping the business environment: Government and the Global CEO.

    
    -   Many CEOs globally have reversed their opinions from last year about
        whether businesses and governments can successfully mitigate systemic
        risk - a majority (57%) now think they can, compared with 46% last
        year.
    -   Almost half of CEOs interviewed (49%) also believe that government
        ownership helps to stabilize an industry during a crisis.
    -   Sixty per cent of CEOs globally were concerned about over-regulation
        - and a rise of 9% in those 'extremely concerned' over last year
        - along with a significant increase in CEO perceptions of rising
        regulatory burdens (67% compared to 57% last year); dialogue and
        closer working between business and government is needed more than
        ever to achieve smarter regulation.
    

But there remains uncertainty in the minds of CEOs about governments' longer term role in shaping and being an active part of the business environment. With governments taking an even greater stake in business than last year, more than two-thirds of CEOs express significant concerns about long-term state involvement in business. With the rapid rise in debt and budget deficits in many economies, credible plans are needed now, setting out how future financial demands will be met.

"Government plans must include an exit strategy from stimulus packages and actions to control the deficit," says Mark Elliott, national public sector and government lead for PwC in Canada. "Prioritized spending and re-designing service delivery should be closely reviewed."

The optimism for international coordination and for more effective governmental collaboration with business is one of the major findings of the survey this year - one that can reset the relationship between business and government.

But clearly, such collaboration is not easy.

"The recent Copenhagen climate change talks demonstrated the pressures created by competing national interests when trying to negotiate global frameworks," says Elliott. "Government leaders are well aware of the challenges that lie ahead, whilst business also worries about the consequences - as shown by the rise in CEO concerns of protectionism in our survey, up 10% from last year."

Rising budget deficits are leading to governments globally being challenged to demonstrate the return on economic stimulus programs - amid estimates by commentators of high costs per job created. Governments are facing a conundrum - how to deal with increasing debt at a time when the needs of businesses and citizens for support are rising.

Indeed, governments must continue to re-build confidence and public trust, reduce uncertainty further through leadership and vision, and create policies and mechanisms for collaboration that are appropriate for today's global flows of capital.

"Governments at all levels should be wary of cutting investment plans and should focus on strategic and sustainable growth," says Elliott. "Various 'capitals' are needed by any society for long-term prosperity, and projects with a high social and economic return that will assist private sector wealth creation, particularly in infrastructure, should be priority."

Methodology

The research for Rethinking and Reshaping the business environment: Government and the Global CEO involved a series of 45-minute telephone interviews with a selection of public sector government leaders in supra-national, national and local government entities. The findings from this qualitative research were used to supplement the quantitative survey, comprising 1,198 interviews with CEOs in 54 countries during the last quarter of 2009.

A full copy of Rethinking and Reshaping the business environment: Government and the Global CEO can be found at www.psrc-pwc.com.

About PwC's Public Sector and Government Practice

PwC's public sector and government practice provides assurance, tax and advisory (consulting and deals) services to build trust and enhance value for its public sector and government clients and stakeholders at all levels- federal, provincial, municipal and aboriginal. With 200 dedicated professionals in more than 21 Canadian cities, our network share their thinking, experience and solutions to develop fresh perspectives and practical advice tailored to the unique challenges of the public sector- insight that allows us to effectively improve the performance and enhance the accountability of government organizations. For more information, please visit www.pwc.com/ca/publicsector.

About PricewaterhouseCoopers LLP

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 163,000 people in 151 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP (www.pwc.com/ca) and its related entities have more than 5,300 partners and staff in offices across the country.

"PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate legal entity.

SOURCE PwC

For further information: For further information: Kiran Chauhan, (416) 947-8983, kiran.chauhan@ca.pwc.com

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