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.