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.