Singapore's risk profile up: PERC

Singapore's risk profile up: PERC

SINGAPORE (Reuter): The recent turmoil in Southeast Asian financial markets has increased Singapore's risk profile slightly, Political & Economic Risk Consultancy (PERC) said.

PERC said in its country risk report, received by Reuters yesterday, that it had cut Singapore's overall rating to 2.73 points in August from 2.63 on a scale of zero to 10 with zero representing the best possible situation and 10 the worst.

It did not give comparative figures for other Southeast Asian countries but said Singapore's behavior during the regional financial crisis had enhanced its standing as a financial center.

"Even so, the increasingly obvious vulnerabilities of its economy to negative political and economic developments in neighboring countries are likely to encourage Singapore to take a more pro-active role in the region," the report said.

PERC said the chances of a negative impact from changes of leadership or government abroad, unfavorable external policy changes, external social unrest and diplomatic and trade disputes had all risen.

It raised its "external risks" rating to 4.33 from 4.14.

The risk of "political impotence" had also risen slightly but the chances of internal social disorder had fallen.

PERC said systemic risks had also risen slightly, with a chance that fall-out from human rights issues might have a negative impact. PERC raised its risk rating on this question to four points from 3.50.

It said the libel suit brought by Prime Minister Goh Chok Tong and 10 other leaders of the ruling People's Action Party (PAP) against the leader of the Workers' Party, Joshua Jeyaretnam, appeared to have backfired on the government.

PERC said reporting of the trial, covered by the "absolute privilege" rule allowing journalists to write about court cases without fear of prosecution provided their reports are fair and accurate, had resulted in some anti-government views reaching local newspapers.

"Mr Jeyaretnam's feisty British lawyer has subjected Mr Goh to withering cross-examination, and the local press has been free to reprint defense claims that the trial was just another example of the government's unwillingness to tolerate political opposition," PERC said.

Jeyaretnam, 71, said the trial, which drew wide international attention and observers from human rights watchdog Amnesty International, was politically motivated and designed to drive him out of politics by bankrupting him.

Goh and the other PAP leaders said they brought the actions only to defend the integrity essential to their ability to rule.