S'pore keeps status as least corrupt in Asia

But it is increasingly vulnerable to graft problems in the region, says Perc



SINGAPORE is still the least corrupt country in Asia, but it is increasingly vulnerable to graft problems in the region, a Hong Kong-based risk consultancy said yesterday.

The Political and Economic Risk Consultancy (Perc) found in an annual survey that Singapore tops the ranking of 13 Asian economies.

Singapore leads second-placed Hong Kong and third-placed Japan - and all three were well ahead of the other economies surveyed.

The Philippines was deemed the most corrupt economy, followed by Thailand and Indonesia, which tied for second-last place, the survey of 1,476 expatriates found.

'Singapore has consistently topped our annual survey as the country where expatriates consider the problem of corruption to be least. The Singapore Government has worked hard to nurture this reputation and it is well deserved,' Perc said.

But the risk consultancy also added: 'Singapore is increasingly vulnerable to corruption in other countries.'

Perc's report found that overall, corruption poses a 'large and growing' threat to Asia.

The 'cross-border' nature of corruption also makes it increasingly difficult to police for even strongly anti-graft economies such as Singapore and Hong Kong, Perc said.

Singapore's exposure to corruption is via its investments in neighbouring economies such as Thailand and Indonesia, it said.

In Thailand, for instance, the corruption problem has been 'politicised' such that it has already embroiled Singapore investment company Temasek Holdings.

Many small foreign companies are also nervous about the status of their investments in Thailand, Perc said.

Thailand did not get the worst grade in the corruption ranking, but its deterioration was 'particularly bad'.

'It is now seen in the same light as Indonesia,' Perc noted.

'The junta that ousted Thaksin Shinawatra as prime minister last September says it is on an anti-corruption campaign, but there is no reason to be confident that its behaviour will be any cleaner than the Thaksin government,' Perc said of the Thai military government.

For Singapore, Temasek's problems with its investment in Shin Corp show how corruption scandals in other countries can have a heavy monetary cost for Singapore, the consultancy said.

Temasek's investment in Shin Corp ran into roadblocks after Mr Thaksin was ousted from power in a military coup.

And as many Singapore companies investing overseas are government-linked companies, there are also diplomatic and domestic political implications, Perc added.

Singapore's other problem with corruption is that foreign individuals who have profited from corruption elsewhere in Asia sometimes park their ill-gotten gains here.

'Many wealthy Indonesians, for example, have invested heavily in Singapore real estate and are using Singapore's growing private banking industry to protect and invest their assets.'

This may benefit Singapore's property and finance industries, but could strain Singapore's relations with its neighbours when they try to recover the assets or seek the extradition of their nationals.

In addition, Singapore's push to create a gaming industry may further complicate its relations with its neighbours.

'Many of the biggest gamblers are likely to be from these countries, and the funds they use to bet will not always be from legitimate sources,' Perc added.

As Singapore becomes a more important financial and gaming centre, enhancing its anti-corruption and anti-money -laundering laws will become more critical, said Mr Phillip Overmyer, executive director of the Singapore International Chamber of Commerce.

But he added: 'It takes a lot of work and a great deal of strong police work, but Singapore knows how to do that.'