Singapore has edged out Hong Kong as Asia's best place to do business, a prominent think tank said yesterday.
Hong Kong held the top spot from 1997-2001 in the reports by the Economist Intelligence Unit -- but has now slipped because of adverse political trends, a labor force ill-suited for high-skilled jobs, a rising budget deficit and competition from mainland China
The think tank predicted Hong Kong's business environment will decline from 2002-2006, although conditions for doing business here will still be "very good" and Singapore will only hold a slight lead.
"The competitive environment is extremely intense," said Daniel Franklin, editorial director at the intelligence unit. "There are other cities, other countries, that are just as eager as Hong Kong to grab a share of the business."
Singapore's stronger public finances, its policies toward private enterprise and competition were its key advantages, the survey said.
The Hong Kong government had no immediate comment.
Asian economies are generally ranked behind those in North America and Western Europe.
The study contended that Hong Kong's political climate had shown the greatest deterioration. It cited close ties between government and big business, declining morale in the civil service and uncertainty over planned political reforms.
"The quality of the work force -- in particular, the ability to adapt to the new skills required in a knowledge-based economy -- also remains a major worry," it said.
The intelligence unit's rankings took into account 70 factors, including levels of political risk and corruption, key economic indicators, foreign exchange regulations, infrastructure and tax policies.
* Australia ranked third and New Zealand was fourth, reversing their previous positions.
* Taiwan was unchanged at fifth out of the 16 Asian economies covered by the report, while China was ranked 12th.
* Pakistan was the worst Asian country for business, though Vietnam, Sri Lanka and Indonesia were not much better, the report said.
Source: AP
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