Singapore rated as the safest place for business in Asia

Coface, French global credit insurer has rated Singapore as the least risky place for business in Southeast Asia.

According to Coface's Country Risk Ratings Report, 2010, Singapore is rated as A1 the highest rank indicating a low risk of payment defaults by Singapore companies. Besides Singapore, Japan is the only other country in Asia to receive the A1 ranking. Malaysia, Taiwan, and Hong Kong are rated as A2, while China and Thailand are rated as A3. The US received an A2 rating, Britain an A3, and Greece an A4. The country risk rating has seven grades in all A1, A2, A3, A4, B, C and D. The ratings are reflective of the extent to which a country's economic, financial, and political outlook influences financial commitments of local companies.

Singapore's low risk rating indicates that Singapore corporations are very strong and are likely to pay their debts.

According to Jerome Cazes, CEO, Coface,

"We decided to upgrade Singapore to A1. A1 being the best in our grades, it means that Singaporean corporates are excellent among corporates. They are highly likely to repay what they owe you. Before the crisis, Singapore was already A1, it was moved to A2 and then A2+ and now A1."

Singapore is one of the very few economies to have survived the financial crisis well. According to the International Monetary Fund's (IMF) Regional Economic Outlook for Asia and the Pacific, Singapore's economy is expected to grow 8.9% this year. Unlike most other major industrialized nations, Singapore does not face a looming public debt crisis and is in fact financially strong. Singapore also has in place effective risk management strategies and high levels of financial transparency. Moreover, it is a politically stable nation with an effective legal system. Given that a country's economic, financial, and political outlook influences financial commitments of local companies, Singapore corporations are more likely to repay their debts and meet their obligations. Coface claims that monthly corporate non-payments have improved from S$376million a month last year to S$100million a month this year.

Commenting on Singapore's role as a key business hub in Asia, Singapore's Trade and Industry Minister, Mr. Lim Hng Kiang said,

"As trade activities grow globally and in the region, there will be a corresponding demand for risk management solutions. Singapore can play a key role in providing political risk insurance to companies engaged in cross border investments in the region. We have therefore made efforts to boost capacity and attract expertise in the underwriting of specialised risks, including areas such as trade credit and political risks insurance."

Singapore rated as the safest place for business in Asia

By: Carolyn Zheng

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