S'pore tops Asia infrastructure survey

S'pore tops Asia infrastructure survey

SINGAPORE (Reuter): Singapore has come first in an infrastructure survey of expatriates living in Asia, according to a report by the Political & Economic Risk Consultancy Ltd.

Hong Kong-based PERC asked 265 expatriate executives about the extent to which physical infrastructure deficiencies impeded their ability to do business.

It said in nine out of the 12 countries covered in the survey, expatriate perceptions were more negative this year than a year ago when the same question was asked.

For best infrastructure, Singapore headed the list, followed by Hong Kong and Japan.

"Of the developing Asian countries, Malaysia has probably done the best job of putting in a modern infrastructure," PERC said.

It said the Philippines "deserves special favorable comment" as the government seems to be pushing the hardest to put new infrastructure in place.

"Although the quality of Philippine infrastructure is still poor, everything from the reliability of power supplies to access to phone lines has improved markedly in recent years due to initiatives of the Ramos government," it said.

PERC said the survey also underscored the importance of the link between financial sector and other reforms.

"Those countries with the best rated physical infrastructures are also the ones with the most developed financial systems."

PERC said the capital needed to fund Asia's infrastructure needs were huge and though personal savings rates were high in Asia, many economies were inefficient in mobilizing these savings and channeling them into productive investments.

China, Vietnam, Thailand and South Korea are examples of such "inefficient mobilization of domestic financial resources".

"A common trait of all four of these economies is that their domestic banking systems have been protected from foreign competition and the capital allocation process has a large political dimension."

The report said given that many of the economies in the region were reluctant to embark on substantive financial sector reform, it was doubtful actual spending on new infrastructure would reach the levels projected by the World Bank.

The bank has projected that US$1.5 trillion needs to be spent on Asian infrastructure projects between 1995 and 2004.

"A lot of the projects governments are talking about are really more wish-lists than bankable plans," PERC said.