FOR the second year running, Singapore has emerged as the best economy in the Asia-Pacific in which to invest. In a survey by Singapore-based political risk consultancy Vriens & Partners, South-east Asian nations have emerged as an increasingly attractive pack of investment destinations. In a field of 20 Asia-Pacific countries, the Philippines, Cambodia and Myanmar made significant leaps up the ranks.
China, India and Vietnam, on the other hand, lost some of their sheen in the Asia-Pacific Investment Climate Index (APICI).
The top 10 Asia-Pacific economies ranked after Singapore were, in order, Hong Kong, New Zealand, Australia, Brunei, Taiwan, Japan, South Korea, Malaysia and Thailand.
The economies were ranked in six areas: fiscal and monetary administration; rule of law; openness to international trade and business; political stability; taxation and corruption. Singapore was second in five of the six categories, and top in fiscal and monetary administration.
The report, noting that the republic lost its top spot in political stability and openness to trade, attributed this to rising political activism, challenges to controversial domestic policies and restrictions on the hiring of foreigners.
This was the third year that Vriens & Partners have compiled this index. To do it, it collated assessments of experts and reports and ran a survey of 200 corporate leaders and policy experts. Of the number, 70 were based in Singapore.
Aside from Brunei, which debuted in fifth place in the top 10, and China, which fell to 11th spot, the top 10 list was largely unchanged.
The ranks from 11th to 20th places were less stable: the Philippines climbed to 12th from 15th last year; and Cambodia, to 14th (16th last year); Indonesia was 13th (15th); and Vietnam came after them in the 15th spot (12th).
Philippine President Benigno Aquino's reform plans earned his country points in the measures of corruption, rule of law and political stability and sent the country up in ranks.
Vriens & Partners said that the business leaders whom it polled said that Vietnam fell three rungs from a year ago because of its weak legal system; populist policies; inadequate training and education systems; corruption and inefficient bureaucracy. Indonesia had similar weaknesses.
The report said of South-east Asia's growing attractiveness to foreign investors: "Despite remaining challenges, the region's rapidly expanding middle class, investments in infrastructure and human capacity and increasing public pressure for government accountability and transparency are driving improvements in its attractiveness to foreign investors."
Source: Business Times, 5 Jul 2013