Domestic issues raise risk concerns<\/p>\n
SINGAPORE (AFP): Indonesia, Malaysia and the Philippines are
\nthe most politically risky nations in Southeast Asia because of
\ndomestic problems, foreign business executives surveyed by a risk
\nconsultancy firm said.<\/p>\n
Financial bulwark Singapore could be vulnerable to any fall-
\nout from these political developments among its neighbors, the
\nHong Kong-based Political and Economic Risk Consultancy Ltd.
\n(PERC) said in its most recent report.<\/p>\n
Business executives who had been surveyed underestimated
\npolitical risks in China and Thailand, it added.<\/p>\n
PERC, which specializes in political and business risk
\nanalyses, asked 1,027 expatriate executives working in the region
\nto rate political risks against economic concerns in 12 Asian
\neconomies.<\/p>\n
\"In general, it seems there is a lot more concern about
\npolitical risks in Southeast Asia at this time than there is in
\nEast and Northeast Asia,\" it said in the report.<\/p>\n
Outside the three Southeast Asian countries, Taiwan got a high
\nrating for political risk because of the military threat posed by
\nChina to the island, it said.<\/p>\n
PERC praised Singapore for \"creating an image of high domestic
\npolitical stability\" but said the city state was vulnerable to
\nexternal political developments such as those from Indonesia and
\nMalaysia, as well as the impact of China-U.S. relations.<\/p>\n
Seventy-one percent of foreign executives in Singapore
\nattached more importance to economic risks and 29 percent gave
\nmore weight to political risks, according to the survey.<\/p>\n
The problem with focusing on economic variables \"is that
\nSingapore risks giving its population and foreign companies
\nworking there a false sense of security with respect to
\nformidable external challenges Singapore faces,\" said PERC.<\/p>\n
\"People know Singapore faces risks from developments in
\nIndonesia and Malaysia, but there is a lack of really in-depth
\ndiscussion about these issues and their implications for
\nSingapore,\" it added.<\/p>\n
For Indonesia, 74 percent of respondents gave more weight to
\npolitical risks against 26 percent who gave more weight to
\neconomic risks.<\/p>\n
\"The root of Indonesia's problems are political, and there is
\nlittle chance for a lasting improvement in economic conditions
\nuntil the country starts to get its political house in order,\"
\nthe report said.<\/p>\n
It cited the challenges to President Abdurrahman Wahid and
\nviolence wracking parts of the vast archipelago.<\/p>\n
For Malaysia, 60 percent of the business executives said they
\nwere more occupied with political risks, compared with 40 percent
\nwho cited economic concerns.<\/p>\n
\"Foreign businessmen are disappointed with Malaysia's economic
\nperformance and are worried that Prime Minister Dr. Mahathir
\nMohamad may be holding on to power too long,\" it said.<\/p>\n
The Philippines' failure to surge ahead after being one of the
\ncountries least affected by the Asian financial crisis in 1997
\nand the problem of a resurgent Muslim separatist insurgency in
\nthe south have heightened political concerns there, PERC added.<\/p>\n
Fifty-one percent of the executives said they were more
\nconcerned about political risks, while 49 percent cited economic
\nrisks.<\/p>\n
Although the Muslim rebellion was localized in the southern
\nregion of Mindanao, \"the negative fallout from such problems is
\nbeing felt nationwide,\" scaring away foreign investors and
\nincreasing perceptions that President Joseph Estrada's government
\n\"is incapable of maintaining stability on a nationwide basis.\"<\/p>\n
Survey results for China showed that 40 percent saw political
\nrisks as more important, compared with 60 percent who focused on
\neconomic risks. The ratio for Thailand was 71 percent against 29
\npercent attaching greater importance to economic risks.<\/p>\n
\"China is a good example of where size really does matter,\"
\nPERC said.<\/p>\n
\"International firms are more willing to accept a difficult
\noperating environment, including high economic and political
\nrisks, if they believe that the market potential is large
\nenough,\" it said.<\/p>\n
For Thailand, PERC said executives there \"have not fully
\nappreciated the threat posed by a corrupt political system that
\npervades business and the wider economy.\"<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/domestic-issues-raise-risk-concerns-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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