Foreign investors more critical of Asia: Survey

Foreign investors more critical of Asia: Survey

SINGAPORE (AFP): Expatriate business executives in Asia have
become more critical of the region in the past year, with Vietnam
seen as the riskiest place and South Korea suffering the worst
decline in image, according to a survey.

Indonesia was perceived as the most corrupt country,
Thailand's woes were seen as cyclical and the Philippines stood
out for optimism, said a Political and Economic Risk Consultancy
Ltd. (PERC) report received here yesterday.

"Expatriate businessmen in Asia are, in general, more critical
of Asia this year than they were a year ago," the report said.

"This could be because the economies of most Asian countries
have slowed, making businessmen more conscious of the region's
socio-political shortcomings."

PERC's 1997 comparative country risk report graded Singapore
as the nation with the lowest economic and socio-political risks
among 12 countries where business executives were polled, with
Vietnam at the other end of the scale.

The Hong-Kong based PERC said perception of socio-political
risks among foreign investors rose the highest in South Korea in
the past year, reflecting the sharpest deterioration in sentiment
among countries surveyed.

Although Thailand's economy, currently hit by a property-led
financial crisis, suffered a similar image setback, the
perception among foreign businesses was that many of its problems
were cyclical in nature, PERC said.

Hong Kong received positive scores despite its impending July
1 transition to Chinese rule, with most investors impressed with
the quality of the business environment, it added.

Despite concerns over the trend of corruption and the
integrity of the judicial system in the colony, the survey grades
indicated that those fears have yet to be realized in any
meaningful way.

"Hong Kong has the most open environment for foreign
investment of any economy in Asia, if not the world," PERC
remarked. Vietnam received the worst marks for openness to
foreign investment.

Among the four countries normally associated with the worst
sociopolitical scenarios, China and Vietnam received slightly
better grades this year but ratings for India and Indonesia
deteriorated, PERC said.

"Indonesia's success in attracting foreign investment in
recent years has resulted in a big increase in the number of
expatriates who are still low on the learning curve in terms of
navigating the Indonesian system," it said.

Indonesia, India and China were seen as the most corrupt
countries for business, with companies forced to offer bribes or
"other improper inducements" to bureaucrats to secure approvals.

PERC said there was a "perception that relatives of President
Soeharto are taking the practice of patronage to new extremes" in
Indonesia, and that foreign companies were finding it
increasingly difficult to develop their businesses "without
bumping into these well-connected people."

The survey singled out the Philippines as the place where
foreign businesses were becoming more optimistic that the country
was heading in the right direction despite domestic problems.

"President (Fidel) Ramos seems not only to have caused the
economy to shift into a higher gear, he also seems to have made
headway in reducing a range of socio-political problems including
corruption, bureaucracy and discriminatory policies against
foreign companies," PERC said.