Few escape bureaucracy grip in Asia

Few escape bureaucracy grip in Asia

Agence France-Presse, Singapore

Indonesia and the Philippines are singled out as two countries in Asia where expatriate businessmen see a pattern of worsening bureaucracy, according to a regional survey which also found much of the rest of Asia awash with rules and red-tape.

The newly released survey by the Political and Economic Risk Consultancy (PERC) highlighted how the human and regulatory dimensions of Asian bureaucracy posed major frustrations.

Meanwhile, Singapore has toppled Hong Kong from its rating as Asia's least bureaucratic economy.

Hong Kong, the former British colony, was rated the most flexible system in terms of having the fewest rules, but appeared to have been punished for a deteriorating standard of spoken English.

Singapore, which has donned the mantle of Asia's least bureaucratic economy, found favor with the business community for providing a tough regulatory environment where clear rules were enforced in a no-nonsense manner.

Businessmen dislike systems where there are so many rules it is difficult to find out what is possible and what is not and decisions are open to interpretation by different authorities, PERC said.

"A lot of systems in Asia" fall into this category, the report said.

"China, India, Indonesia, Vietnam so classify. The Philippines and Taiwan probably do too. Taiwan, Korea and Malaysia all have bureaucracies where both the human and regulatory dimensions can pose major frustrations."

Of the 12 economies rated on a scale of 0-10, only Singapore (3.10) and Hong Kong (3.64) achieved better than a pass mark.

The Hong Kong government has a reputation for staying out of the way of business but in the past four years there has been growing criticism of the civil service.

"We suspect there are several causes of the criticism," PERC said.

"A number of recent private surveys, including our own, suggest that businessmen are unhappy with the quality of English spoken in Hong Kong ... Many people blame the government, and by implication civil servants, for allowing English standards to deteriorate."

South Korea, bottom of the pack six years ago in the annual survey, has shot up to third with a 5.50 rating "because senior politicians have become more sensitive to the needs of business and they have been passing legislation to improve the regulatory environment."

"This has forced civil servants to change their practices in ways that have promoted greater efficiency."

Indonesia and the Philippines were moving in the opposite direction because the pay for civil servants was very low "which hurts morale and encourages corruption and inefficiency," according to the report.

But PERC said improving bureaucracy did not mean cutting or raising civil servant salaries but lay in removing many functions from the public sector altogether.

China, one of the most bureaucratic countries in Asia, was listed as doing the most in this direction, hiving off the production functions of various ministries, and drastically reducing the size of the civil service.

Malaysia provided an example of how such a plan could also backfire, after private companies which took over public transport functions ran into serious financial difficulty, PERC said.

The problem for Asian countries was to strike the right balance between the public and private sectors, it said.