EMERGING MARKETS INFRASTRUCTURE FUND INC, N-30D, 1997-01-30

EMERGING MARKETS INFRASTRUCTURE FUND INC
N-30D, 1997-01-30

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[PHOTO]

The Emerging Markets
Infrastructure Fund, Inc.
- - -----------------------------------------------------
ANNUAL REPORT
NOVEMBER 30, 1996

<PAGE>
CONTENTS

<TABLE>
<S> <C>
Letter to Shareholders................................................ 1

Portfolio Summary..................................................... 9

Schedule of Investments............................................... 11

Statement of Assets and Liabilities................................... 15

Statement of Operations............................................... 16

Statement of Changes in Net Assets.................................... 17

Financial Highlights.................................................. 18

Notes to Financial Statements......................................... 19

Report of Independent Accountants..................................... 23

Results of Annual Meeting of Shareholders............................. 24

Tax Information....................................................... 24

Description of Dividend Reinvestment and Cash Purchase Plan........... 25
</TABLE>

PICTURED ON THE COVER IS THE PORT OF SANTOS LOCATED IN BRAZIL.

- - --------------------------------------------------------------------------------
<PAGE>
LETTER TO SHAREHOLDERS

January 13, 1997

DEAR SHAREHOLDER:

We are pleased to report on the activities of The Emerging Markets
Infrastructure Fund, Inc. (the "Fund") for the year ended November 30, 1996.

PERFORMANCE

At November 30, 1996, the Fund's net asset value ("NAV") was $13.39 per share
(net of dividends paid of $0.09 per share), as compared to $11.60 on November
30, 1995.

For the period December 1, 1995 through November 30, 1996, the Fund's total
return, based on NAV and assuming the reinvestment of dividends and
distributions, was 16.3%. By comparison, the Morgan Stanley Capital
International Emerging Markets Free Index (the "Index") returned 10.2% in the
same period. From the commencement of investment operations on December 29, 1993
through November 30, 1996, the Fund's total return, based on NAV and assuming
the reinvestment of dividends and distributions, declined by 2.4%. The Index
fell by 6.8% during this period.

At November 30, 1996, the Fund had invested $158.3 million in infrastructure
companies in over 15 developing countries, $18.7 million in companies that
provide services or products ancillary to infrastructure development in several
of the same markets and an additional $3.0 million in investment companies in
five developing countries. The Fund had also made investments totaling $15.7
million in infrastructure companies in the developed markets of Italy, the
Netherlands, Spain and the United Kingdom.

INVESTMENT PHILOSOPHY

Our investment philosophy is simple: for developing economies to grow, basic
services must be provided. Implementation of basic services on a level
sufficient for growth means that these sorts of companies are likely to generate
high internal rates of return. Thus, as emerging market economies sustain their
rapid growth, we expect infrastructure-related companies within those markets to
grow with equal rapidity.

We believe that powerful trends of deregulation and privatization around the
world will offer the Fund many new opportunities in the future. We plan to
pursue these opportunities as government-owned companies involved in electricity
and gas distribution, construction, and telecommunications (especially) undergo
privatization.

INFRASTRUCTURE: LONG-TERM DEMAND SHOULD DRIVE LONG-TERM APPRECIATION

Developing-nation economies are growing far more swiftly than those of
established nations and are projected to do so for at least the foreseeable
future. Economic growth, in turn, drives growth in personal income and standards
of

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1
<PAGE>
LETTER TO SHAREHOLDERS

living, which drive demand for goods and services. Such demand cannot be met
without sufficient capabilities in basic telephony, electricity and
construction. Within most developing nations, however, both the quality and
quantity of infrastructure typically are low.

Consider telephone service, for example, which is taken for granted in developed
nations. By contrast, the availability of telephony is far lower in emerging
nations. As measured by the standard of teledensity (I.E., the level of
telephone penetration within the population), the emerging world is far behind.
The table below compares the teledensity of most major emerging markets with
that of the world's teledensity leaders.

SELECTED NATIONS COMPARATIVE TELEDENSITY, 1995

<TABLE>
<CAPTION>
COUNTRY TELEDENSITY* COUNTRY TELEDENSITY*
- - ------------ ------------- ----------------- -------------
<S> <C> <C> <C>
India 1.07 Chile 13.24
Indonesia 1.69 Argentina 16.24
Philippines 1.84 Hungary 18.38
China 2.29 Czech Republic 23.31
Russia 4.50 Canada 59.24
Thailand 7.54 Switzerland 60.59
Brazil 8.48 Denmark 61.86
Mexico 9.58 U.S. 63.33
Venezuela 10.92 Sweden 68.83
Poland 13.06

* phone lines per 100 people
</TABLE>

- - ------------------------
SOURCE: ING BARINGS

The table depicts the large gap between the teledensities of emerging and
developed nations, evidence that there is a huge amount of unmet demand.
Positive consequences for service providers are clear: expansion of services,
rising tariff rates and economies of scale, all of which offer tremendous scope
to boost earnings. Even if a low-ranking country were to double its teledensity
(E.G., the Philippines rising to 3.68% from 1.84%), for example, its providers
would greatly benefit from a resulting explosion in revenues and, presumably,
earnings.

The telephony scenario often applies as well to electric power services, another
sector in which the developing world has extremely low capacity and delivery
relative to the rest of the world. An indication of rising electricity demand is
the change in the regional distribution of worldwide capacity projected over the
next few years. Emerging regions are forecast to possess about 46% of global
capacity in 2000, up from about 42% in 1994. Both the amount and rate of their
capacity addition, furthermore, should be much higher than those of the
developed world.

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2
<PAGE>
LETTER TO SHAREHOLDERS

PERCENTAGE OF WORLDWIDE INSTALLED ELECTRICITY GENERATION
CAPACITY BY REGION, 2000 VS. 1994 (AMOUNTS IN GIGAWATTS)

<TABLE>
<CAPTION>
EMERGING REGIONS 1994* 2000* % CHANGE CAGR**
- - ---------------------------------------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Non-Japan Asia 16.12 19.53 41.30 5.93
Eastern Europe/FSU*** 14.65 13.74 9.48 1.52
Latin America 6.12 6.69 27.41 4.12
Middle East 2.74 3.21 36.65 5.34
Africa 2.69 2.78 20.79 3.20
----------- ----------- ----------- ---
TOTAL EMERGING 42.32% 45.95% 17.68% 2.75%

DEVELOPED REGIONS
- - ----------------------------------------
North America 29.56 26.85 6.0 0.98
Western Europe 20.75 20.27 13.97 2.20
Japan 7.38 6.94 9.80 1.57
----------- ----------- ----------- ---
TOTAL DEVELOPED 57.69% 54.06% 9.35% 1.50%

TOTAL WORLD 100.00% 100.00% 16.68% 2.61%
----------- ----------- ----------- ---
----------- ----------- ----------- ---
</TABLE>

- - ------------------------
* columns do not add to exactly 100% due to rounding

** CAGR = Compound Annual Growth Rate

*** FSU = Former Soviet Union

SOURCE: SALOMON BROTHERS

Demand within emerging nations for construction of housing, commercial
buildings, schools, roads, bridges and port facilities is heavy and will remain
so well into the future. We view this as another logical consequence of the
economic development process.

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3
<PAGE>
LETTER TO SHAREHOLDERS

Using cement and non-Japan Asia as proxies for construction and the overall
emerging world, respectively, we see that a shortage of cement is projected
through at least the millenium, most dramatically in China. This clearly
indicates that unmet demand for construction should continue to be quite
substantial over the next few years.

NON-JAPAN ASIA CEMENT SUPPLY DEMAND BALANCE 1995E-2000E*
(MILLIONS OF TONS)

<TABLE>
<CAPTION>
COUNTRY 1995E 1996E 1997E 1998E 1999E 2000E
- - -------------------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
China 3.0 (1.0) (5.7) (11.0) (17.1) (24.1)
India 3.1 2.2 3.7 7.7 7.8 7.8
S. Korea 1.3 2.9 0.1 0.2 (2.9) (3.1)
Thailand 1.1 0.4 3.6 3.4 5.0 1.1
Taiwan (2.8) (1.3) (1.8) (3.1) (1.8) (2.4)
Indonesia (0.3) (1.1) 0.8 2.4 5.3 2.0
Malaysia (0.3) (0.7) (1.3) (0.5) 0.4 0.6
Philippines (0.5) (2.3) (2.9) (0.4) 2.0 0.1
Hong Kong (2.8) (2.8) (3.0) (2.8) (2.5) (2.5)
Vietnam (3.2) (2.2) 0.2 0.1 0.9 6.1
Others (5.5) (5.4) (5.8) (6.0) (6.2) (7.0)
--- ----- ----- ----- ----- -----
TOTAL (6.9) (11.3) (12.1) (10.0) (9.1) (21.4)
--- ----- ----- ----- ----- -----
--- ----- ----- ----- ----- -----
</TABLE>

- - ------------------------
( ) = Shortage of Supply

* E = Estimate

SOURCE: KLEINWORT BENSON RESEARCH

The Fund is well-situated to profit from the demand for infrastructure
development among emerging nations. We have built positions in many of the
emerging world's top telephony, electricity and construction stocks.

To best illustrate how we have put our investment philosophy to work, we'd like
to discuss a few of our specific holdings.

ELEKTRIM SPOLKA AKCYJNA S.A.

We have increasingly tried to diversify the portfolio into emerging equity
markets which most investors find relatively less accessible. One such market is
Poland, which we recently entered with the purchase of shares in Elektrim Spolka
Akcyjna S.A. ("Elektrim").

Elektrim was strictly a trading company for over 40 years. The 1990
de-monopolization of foreign trade in Poland, however, prompted its management
to foresee that trading activity would eventually shrink, in which case it would
be more prudent to transform the company into a manufacturer and distributor.
Since this latter process began in 1992,

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4
<PAGE>
LETTER TO SHAREHOLDERS

Elektrim has acquired controlling or partial interests in nearly 100 companies
involved in its traditional trading businesses of electrical cable and
machinery, power equipment, engineering/construction, lighting and
telecommunications.

We regard Elektrim as somewhat atypical in two ways. First, it is a collection
of distinct companies linked by a holding framework, not an integrated entity.
Second, its scope extends to a variety of infrastructure-related operations
rather than concentrating on one or two. These characteristics contribute to its
long-term investment appeal, for which positive factors are numerous:

- - - Elektrim offers investors a unique, diversified opportunity to benefit both
from Poland's remarkable economic progress and the huge need for
infrastructure rehabilitation in Poland and throughout Eastern Europe.

- - - Sparked by a new chief financial officer, Elektrim is in the process of
shedding non-core operations to concentrate on those it knows best.

- - - In early 1996, a joint venture in which Elektrim is the majority partner was
awarded one of Poland's two mobile telecommunications licenses. Although
higher-than-expected start-up costs will somewhat delay the venture's eventual
profitability, we consider it an undervalued asset which should make a
significant contribution to Elektrim's future results.

- - - Elektrim has the potential to unlock substantial additional shareholder value
by combining some of its affiliated entities and either selling them or
spinning them off into separate publicly traded companies.

- - - It is the single largest landowner in Poland. Like its telecom joint venture,
its property is another currently undervalued asset: as the country's economic
condition continues to improve, the property could dramatically rise in value.

- - - Elektrim is a key holding for equity portfolios focusing on global
infrastructure, Eastern Europe or emerging markets more generally.

EREGLI DEMIR VE CELIK FABRIKALARI T.A.S.

Another new market for the Fund is Turkey. As our first Turkish stock, we have
selected Eregli Demir ve Celik Fabrikalari T.A.S., known in short form as
"Erdemir."

State-controlled Erdemir is one of Turkey's largest steel companies and the sole
domestic integrated producer of flat steel. This latter point is important in
that prices of many other types of steel are suffering from oversupply
conditions both globally and in Turkey. Flat steel, by contrast, has
historically enjoyed excess demand in Turkey and is the fastest-growing segment
of the Turkish steel industry. One of Erdemir's main goals is to boost its flat
steel capacity so that it can replace imports with domestic production and, in
doing so, become Turkey's sole supplier of flat steel.

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5
<PAGE>
LETTER TO SHAREHOLDERS

The foundation of our investment thesis for Erdemir rests on these two pillars:

- - - IT IS POSITIONING ITSELF NOW FOR STRONG GROWTH IN THE FUTURE. Erdemir is in
the process of adding substantial production capacity, which is expected to
become fully operational by the end of 1997. Thus, we do not expect profits to
rise accordingly until 1998, as the new capacity will allow both for much
higher sales and the introduction of many more higher-margin products; and
heavy depreciation charges recede. Another notable positive is that Erdemir
appears to be in the right place at the right time in the steel cycle, since
steel consumption is closely correlated with a country's per capita gross
domestic product (I.E., for developing nations, rising GDP typically indicates
rising industrialization, which boosts demand for steel). We believe that
Turkey's per capita GDP is very low relative to that of many other developing
nations and is poised for robust growth. Erdemir should greatly prosper from
the resulting increase in demand for steel.

- - - IT SHOULD BE A MAJOR BENEFICIARY OF A RERATING OF THE TURKISH MARKET. The
Turkish equity market sells at valuation levels among the world's lowest. This
is not surprising, as there has been much economic and political bad news over
the last few years. We believe that the worst probably is over, however, and
that global investors will gradually begin to appreciate the cheapness of
Turkish equities.

Erdemir's status both as one of Turkey's largest industrial companies and its
most liquid stock should enhance its intrinsic appeal as the rerating process
takes shape. Its likely privatization within the next couple of years,
furthermore, should help bring it to the attention of a widening universe of
potential investors.

SIAM CEMENT CO. LTD.

A company whose shares the Fund has owned for some time is Siam Cement Co. Ltd.
("SCC"). SCC was founded by the Thai royal family (which retains approximately
36% ownership) in 1913 as Thailand's first cement company. Since then, it has
evolved into the country's largest industrial company of any kind. In the
domestic cement business, SCC encountered minimal competition until the 1950s
and continues to hold a dominant market share (46% of 1995 industry production)
today.

Although most analysts tend to highlight SCC's cement operations, part of its
attraction is that it is becoming less and less of a cement company. Cement
accounted for only 21% of 1995 sales, the remainder of which came from metal,
electrical and automotive products; paper and packaging; iron and steel;
petrochemicals; ceramics; and more. With this combination of business lines, we
regard SCC as a veritable infrastructure conglomerate.

There are strong reasons supporting investment in SCC:

- - - A significant increase in projected government spending on infrastructure will
likely raise demand for cement and many of SCC's other products.

- - - Its broad diversification provides it with two substantial advantages:

- Unlike its primary competitors, most of which are pure cement companies,
it is far less vulnerable to the advancing maturation of the Thai cement
sector.

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6
<PAGE>
LETTER TO SHAREHOLDERS

- Its future earnings stream should be less volatile.

- - - Among Thai cement makers, SCC has the most highly developed distribution and
marketing network, widest geographical reach (both within Thailand and
regionally) and lowest cost structure. As the Thai market matures, these
characteristics best position SCC to grow its increasingly important export
business.

- - - Like all Thai cement companies, SCC is adding to capacity. Its depreciation
policy, furthermore, is quite conservative. These factors should help cash
flows explode following completion of new facilities, allowing SCC to reduce
interest expense via debt prepayments as well as send more of its cash flow
directly to the bottom line.

- - - The presence of automobiles in Thailand is expanding, both from a new General
Motors assembly plant and rising domestic sales. This is good news for SCC's
automotive business, which includes tires, engines and many other components.

- - - Some of SCC's product lines that have achieved fairly low profitability in
recent years (E.G., paper, steel, petrochemicals) should start to generate
positive earnings by 1998 or 1999, suggesting the potential for
higher-than-expected earnings growth.

Clearly, SCC is a strong equity play on the growth of emerging markets
infrastructure. We believe that its prospects for future appreciation are
bright.

OUTLOOK

Recent comments by Federal Reserve chairman Alan Greenspan were widely
interpreted as negative for U.S. equities. In a clear reference to U.S. stocks
and bonds, he stated that he considered financial assets unduly overvalued. We
do not entirely share this view. In addition, Mr. Greenspan's comments may be
interpreted as positive for emerging equity markets in that they suggest that
better values are more plentiful in overseas markets, an opinion with which we
enthusiastically agree.

We regard the worldwide backdrop for equities as generally quite favorable. Good
prospects for corporate earnings growth are supported by a confluence of
positive conditions: steady-to-declining interest rates; little threat of rising
inflation; responsible government fiscal and monetary policies; and ample
liquidity available for investment.

The Fund is poised to take advantage of opportunities within the world's
fastest-growing economic/geographical areas. Unmet demand in many emerging
markets for basic infrastructure capabilities (particularly telephony,
electricity and construction) is very high and unlikely to meaningfully decline
over the next few years. Additional opportunities in the securities markets
should appear, furthermore, both as governments privatize state-controlled
monopolies and the level of foreign direct investment increases.

In an important organizational development, we are pleased to report that
Richard Watt of BEA Associates has been named as the Fund's Chief Investment
Officer as of January 1, 1997. Richard has contributed his expertise in emerging
equity markets to the Fund and several other BEA closed-end funds since joining
BEA in 1995. He succeeds

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7
<PAGE>
LETTER TO SHAREHOLDERS

Emilio Bassini, who successfully guided the Fund from its 1993 inception through
the end of 1996. Emilio resigned his position in order to focus his efforts
exclusively on private equity investments through his recently organized firm,
Bassini, Playfair + Associates LLC, and will continue to serve BEA as a
consultant.

We wish to remind shareholders whose shares are registered in their own name
that they automatically participate in the Fund's dividend reinvestment program.
The automatic Dividend Reinvestment Plan (the "Plan") can be of value to
shareholders in maintaining their proportional ownership interest in the Fund in
an easy and convenient way. A shareholder whose shares are held in the name of a
broker/dealer or nominee should contact that party for details about
participating in the Plan. The Fund also offers shareholders a voluntary Cash
Purchase Plan. The Plan and the Cash Purchase Plan are described on pages 25
through 27 of this report.

We appreciate your continued confidence in the Fund and would be pleased to
respond to your questions and comments.

Sincerely yours,

[SIG]
Richard Watt
Chief Investment Officer*

- - --------------------------------------------------------------------------------
* Richard Watt, who is a Managing Director of BEA Associates, is primarily
responsible for management of the Fund's assets. Mr. Watt has served the Fund in
such capacity since January 1, 1997. He joined BEA Associates on August 2, 1995.
Mr. Watt was formerly associated with Gartmore Investment Limited in London,
where he was head of emerging markets investments and research. In this
capacity, he led a team of four portfolio managers and was manager of a
closed-end Latin American fund focusing on smaller companies. Before joining
Gartmore in 1992, Mr. Watt was a director of Kleinwort Benson International
investments in London, where he was responsible for research, analysis and
trading of equities in Latin America and other regions. Mr. Watt is a Director,
Senior Vice President and Chief Investment Officer of the Fund and is also a
Director, Senior Vice President and Chief Investment Officer of The Brazilian
Equity Fund, Inc., The Emerging Markets Telecommunications Fund, Inc. and The
Latin America Equity Fund, Inc. Mr. Watt is also Senior Vice President and Chief
Investment Officer of The Chile Fund, Inc., The First Israel Fund, Inc., The
Latin America Investment Fund, Inc. and The Portugal Fund, Inc.

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8
<PAGE>
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THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

PORTFOLIO SUMMARY - AS OF NOVEMBER 30, 1996 (UNAUDITED)
- - --------------------------------------------------------------------------------
SECTOR ALLOCATION

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
<S> <C> <C>
11/30/95 11/30/96
Cellular Communications 11.60% 10.36%
Electric Distribution 17.20% 20.82%
Electric Generation 13.70% 7.98%
Gas & Oil 9.30% 7.59%
Infrastructure & Construction 8.70% 10.09%
Investment Companies 1.60% 1.39%
Local and/or Long Distance Telephone
Service 24.90% 18.21%
Telecommunications Equipment 2.40% 2.10%
Other Infrastructure 8.40% 12.16%
Cash & Cash Equivalents 2.20% 9.30%
</TABLE>

GEOGRAPHIC ASSET BREAKDOWN

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
<S> <C> <C>
11/30/95 11/30/96
Asia 21.70% 23.36%
Caribbean 0.80% 0.53%
Eastern Europe 2.20% 5.07%
Europe 8.10% 10.99%
Latin America 56.80% 44.02%
Middle East 6.10% 4.99%
Global 3.30% 3.71%
Cash & Cash Equivalent 1.00% 7.33%
</TABLE>

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9
<PAGE>
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THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

PORTFOLIO SUMMARY - AS OF NOVEMBER 30, 1996 (UNAUDITED) (CONTINUED)
- - --------------------------------------------------------------------------------
SUMMARY OF EQUITY OR EQUITY-LINKED SECURITIES BY COUNTRY/REGION

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS
<S> <C> <C>
11/30/95 11/30/96
Argentina 10.80% 2.44%
Brazil 16.52% 14.85%
Chile 15.75% 14.13%
Eastern Europe 2.23% 5.07%
Hong Kong 8.07% 8.28%
Israel 6.12% 5.00%
Italy 2.58% 4.38%
Malaysia 3.49% 4.77%
Mexico 6.10% 4.41%
Peru 2.91% 3.88%
Philippines 3.24% 3.06%
Portugal 1.42% 3.69%
Thailand 2.84% 2.72%
Global 3.30% 3.71%
Other 12.40% 10.31%
</TABLE>

TOP 10 HOLDINGS, BY ISSUER

<TABLE>
<CAPTION>
Percent of Net
Holding Sector Country/Region Assets
<C> <S> <C> <C> <C>
- - --------------------------------------------------------------------------------------------------------------------------------
1. Companhia Energetica de Minas Gerais Electric Distribution Brazil 4.0
- - --------------------------------------------------------------------------------------------------------------------------------
2. Chilectra S.A. Electric Distribution Chile 3.7
- - --------------------------------------------------------------------------------------------------------------------------------
3. Cementos Mexicanos, S.A. de C.V. Other Infrastructure Mexico 3.4
- - --------------------------------------------------------------------------------------------------------------------------------
4. Companhia Paulista de Forca e Luz Electric Distribution Brazil 3.0
- - --------------------------------------------------------------------------------------------------------------------------------
5. Philippine Long Distance Telephone Co. Local and/or Long Distance
Telephone Service Philippines 2.9
- - --------------------------------------------------------------------------------------------------------------------------------
6. Millicom International Cellular S.A. Cellular Communications Global 2.7
- - --------------------------------------------------------------------------------------------------------------------------------
7. New World Infrastructure Ltd. Infrastructure &
Construction Hong Kong 2.5
- - --------------------------------------------------------------------------------------------------------------------------------
8. Centrais Eletricas de Santa Catarin Electric Distribution Brazil 2.2
- - --------------------------------------------------------------------------------------------------------------------------------
9. Compania de Telecomunicaciones de Chile S.A. Local and/or Long Distance
Telephone Service Chile 2.1
- - --------------------------------------------------------------------------------------------------------------------------------
10. Telefonica del Peru S.A. Local and/or Long Distance
Telephone Service Peru 1.9
- - --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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10
<PAGE>
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THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

SCHEDULE OF INVESTMENTS - NOVEMBER 30, 1996
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
<S> <C> <C>
- - -----------------------------------------------------
EQUITY OR EQUITY-LINKED SECURITIES-90.70%
EQUITY OR EQUITY-LINKED SECURITIES OF INFRASTRUCTURE
COMPANIES IN EMERGING COUNTRIES-73.35%
ARGENTINA-2.16%
Argentine Cellular
Communications Holdings
Ltd.*+.................. 347,578 $ 387,125
Camuzzi Argentina
S.A.*+.................. 1,729,347 3,289,996
Citicorp Equity
Investments S.A., Class
B....................... 202,025 677,065
Polledo S.A.+............ 308,626 293,316
-----------
TOTAL ARGENTINA (Cost $7,809,400)....... 4,647,502
-----------
BOLIVIA-1.57%
Compania Boliviana de
Energia Electrica S.A.
(Cost $1,854,055)....... 79,200 3,395,700
-----------
BRAZIL-14.85%
Bardella Industrias S.A.
PN...................... 4,386 441,572
Centrais Eletricas
Brasileiras S.A. ON..... 12,259,179 3,904,424
Centrais Eletricas de
Santa Catarin, Class B
PN+..................... 5,773,220 4,750,471
Companhia Energetica de
Minas Gerais ON......... 3,000,000 153,921
Companhia Energetica de
Minas Gerais PN......... 265,535,400 8,482,738
Companhia Paulista de
Forca e Luz ON+......... 64,837,500 6,471,197
Companhia Siderurgica
Nacional ON............. 79,100,000 2,178,504
Telecomunicacoes de Sao
Paulo S.A. PN........... 9,482,291 1,689,004
Telecomunicacoes do
Parana S.A. PN.......... 994,000 433,030
Telecomunicacoes do Rio
de Janeiro S.A. PN+..... 4,371,000 452,756
Trafo Equipamentos
Electricos S.A. PN+..... 509,800 592,217
Usinas Siderurgicas de
Minas Gerais S.A.
ADR++................... 142,400 1,424,712
Usinas Siderurgicas de
Minas Gerais S.A. PN.... 1,054,700,000 1,051,637
-----------
TOTAL BRAZIL (Cost $26,722,419)......... 32,026,183
-----------

<CAPTION>
No. of Value
Description Shares (Note A)
- - -----------------------------------------------------
<S> <C> <C>
CHILE-14.13%
Besalco S.A.............. 161,674 $ 991,134
Chilectra S.A. ADS++##... 145,600 8,008,000
Chilgener S.A............ 243,803 1,280,277
Chilquinta Energia
S.A..................... 6,113 71,174
Compania de
Telecomunicaciones de
Chile S.A. ADS.......... 48,000 4,566,000
Compania Electrica del
Rio Maipo S.A........... 2,320,540 1,064,190
Compania General de
Electricidad S.A........ 605,258 2,646,251
Compania Nacional de
Telefonos S.A........... 4,285 3,055
Empresa Electrica de
Antofagasta S.A......... 605,459 278,380
Empresa Electrica de
Arica S.A............... 1,321,792 273,247
Empresa Electrica de
Iquique S.A............. 978,133 278,670
Empresa Electrica
Pehuenche S.A........... 1,044,341 1,161,344
Empresa Nacional de
Electricidad S.A........ 3,092,853 1,682,935
Empresa Nacional de
Telecomunicaciones
S.A..................... 195,234 1,670,054
Empresas Emel S.A........ 81,328 1,632,937
Enersis S.A. ADR......... 116,000 3,277,000
Sociedad Austral de
Electricidad S.A........ 61,355 1,603,671
-----------
TOTAL CHILE (Cost $26,070,172).......... 30,488,319
-----------
EASTERN EUROPE-5.07%
Brisa Bridgestone
Sabanci................. 4,119,788 1,811,338
Elektrim Spolka Akcyjna
S.A..................... 90,947 829,183
Eregli Demir Ve Celik
Fabrikalari T.A.S....... 15,936,400 2,257,722
Global Telesystems
Group*+................. 189,345 3,786,900
Petersburg Long Distance
Inc.+................... 317,100 2,259,337
-----------
TOTAL EASTERN EUROPE
(Cost $9,075,852)...................... 10,944,480
-----------
HONG KONG-8.28%
Cheung Kong
Infrastructure
Holdings................ 1,390,000 3,370,732
China Light & Power Co.
Ltd..................... 493,000 2,116,865
Hong Kong & China Gas
Co...................... 1,584,576 3,156,036
</TABLE>

- - --------------------------------------------------------------------------------
11
<PAGE>
- - --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

SCHEDULE OF INVESTMENTS (CONTINUED)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- - -----------------------------------------------------
<S> <C> <C>
HONG KONG (CONTINUED)
Hong Kong Electric
Holdings................ 642,000 $ 2,059,183
Hong Kong
Telecommunications Ltd.
ADR##................... 103,649 1,813,857
New World Infrastucture
Ltd.+................... 1,799,600 5,353,182
-----------
TOTAL HONG KONG (Cost $15,074,717)...... 17,869,855
-----------
INDONESIA-1.62%
PT Citra Marga Nusaphala
Persada................. 1,553,000 1,307,964
PT Semen Gresik.......... 719,000 2,192,260
-----------
TOTAL INDONESIA (Cost $3,029,077)....... 3,500,224
-----------
ISRAEL-3.60%
Bezeq, Israeli
Telecommunication Corp.,
Ltd..................... 284,680 691,081
ECI Telecom Ltd.......... 58,700 1,174,000
Geotek Communications,
Inc.+##................. 39,500 276,500
Geotek Communications,
Inc., Convertible
Preferred Series M,
8.50%*.................. 100 791,684
Geotek Communications,
Inc.,, Convertible
Preferred Series N,
(units)*+(a)............ 1,584 1,077,896
Nexus Telecommunication
Systems Ltd.,
(units)+(b)............. 210,283 873,989
Superbowl Acquisition
LDC*=/=................. 96 1,009,728
Tadiran
Telecommunications
Ltd.+................... 18,500 397,750
Teledata Communication
Ltd.+................... 65,700 1,461,825
-----------
TOTAL ISRAEL (Cost $8,576,700).......... 7,754,453
-----------
MALAYSIA-4.77%
Petronas Gas Berhard..... 375,000 1,528,492
Petronas Gas Berhard,
Int'l Warrants (expiring
8/17/00)+............... 640,000 1,278,987
Technology Resources
Industries+............. 1,657,000 3,376,949
Tenega Nasional
Berhard................. 345,000 1,570,044
United Engineers Ltd..... 280,000 2,537,396
-----------
TOTAL MALAYSIA (Cost $12,166,930)....... 10,291,868
-----------
PERU-3.88%
Ontario-Quinta A.V.V.*... 2,085,000 3,036,838
Telefonica del Peru S.A.
ADR..................... 94,900 1,838,687
<CAPTION>
No. of Value
Description Shares (Note A)
- - -----------------------------------------------------
<S> <C> <C>
PERU (CONTINUED)
Telefonica del Peru S.A.,
Class B................. 1,157,354 $ 2,265,897
<CAPTION>
Par (000)
-------------
<S> <C> <C>
Tele 2000 S.A.,
Convertible Note, 9.75%,
04/14/97++.............. USD 1,260 1,234,800
-----------
TOTAL PERU (Cost $6,665,517)............ 8,376,222
-----------
PHILIPPINES-2.88%
<CAPTION>
No. of
Shares
-------------
<S> <C> <C>
Philippine Long Distance
Telephone Co. ADR##
(Cost $8,549,750)....... 108,200 6,221,500
-----------
PORTUGAL-3.69%
Cimpor Cimentos de
Portugal, S.A........... 105,640 2,208,733
Portugal Telecom, S.A.... 144,857 3,845,358
Portugal Telecom, S.A.
ADR..................... 72,200 1,913,300
-----------
TOTAL PORTUGAL (Cost $6,806,727)........ 7,967,391
-----------
PUERTO RICO-0.53%
Cellular Communications
of Puerto Rico, Inc.+
(Cost $1,231,325)....... 54,600 1,146,600
-----------
SINGAPORE-1.19%
Keppel Corp. Ltd. (Cost
$2,324,745)............. 330,000 2,564,706
-----------
SOUTH KOREA-1.03%
Pohang Iron & Steel Co.,
Ltd., ADR## (Cost
$2,915,000)............. 110,000 2,213,750
-----------
THAILAND-0.39%
Advanced Information
Services Public Co. Ltd.
Foreign Registered (Cost
$950,012)............... 70,500 836,378
-----------
GLOBAL-3.71%
International Wireless
Communications, Inc.,
Series D*+.............. 5,503 2,063,625
International Wireless
Communications, Inc.,
Series F*+.............. 386 144,750
</TABLE>

- - --------------------------------------------------------------------------------
12
<PAGE>
- - --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

SCHEDULE OF INVESTMENTS (CONTINUED)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- - -----------------------------------------------------
<S> <C> <C>
GLOBAL (CONTINUED)
International Wireless
Communications, Inc.,
Warrants (expiring
12/31/98)*+............. 31 $ 581
Millicom International
Cellular S.A.+##........ 152,981 5,794,155
-----------
TOTAL GLOBAL (Cost $4,958,198).......... 8,003,111
-----------
TOTAL EMERGING COUNTRIES
(Cost $144,780,596).................... 158,248,242
-----------
EQUITY SECURITIES OF INFRASTRUCTURE COMPANIES IN
DEVELOPED COUNTRIES-7.30%
ITALY-4.38%
Edison S.p.A............. 305,000 1,946,254
Telecom Italia Mobile
S.p.A................... 813,600 1,914,008
Telecom Italia Mobile
S.p.A., Non Convertible
Savings Shares.......... 1,155,000 1,539,595
Telecom Italia S.p.A..... 813,600 1,916,692
Telecom Italia S.p.A.,
Non Convertible Savings
Shares.................. 1,155,000 2,122,660
-----------
TOTAL ITALY (Cost $5,784,151)........... 9,439,209
-----------
NETHERLANDS-0.68%
Koninklijke PTT Nederland
N.V. (Cost
$1,063,513)............. 38,900 1,456,876
-----------
SPAIN-1.98%
Iberdrola S.A............ 182,100 2,099,684
Repsol S.A. ADR.......... 59,600 2,182,850
-----------
TOTAL SPAIN (Cost $3,375,420)........... 4,282,534
-----------
UNITED KINGDOM-0.26%
Orange plc ADR+ (Cost
$584,188)............... 37,400 556,325
-----------
TOTAL DEVELOPED COUNTRIES
(Cost $10,807,272)..................... 15,734,944
-----------
EQUITY SECURITES OF COMPANIES PROVIDING OTHER
ESSENTIAL SERVICES IN THE DEVELOPMENT OF AN EMERGING
COUNTRY'S INFRASTRUCTURE-8.66%
ARGENTINA-0.29%
Corp. Cementera Argentina
(Cost $860,881)......... 134,268 628,635
-----------
<CAPTION>
No. of Value
Description Shares (Note A)
- - -----------------------------------------------------
<S> <C> <C>
ECUADOR-0.76%
La Cemento Nacional GDR++
(Cost $1,490,362)....... 7,481 $ 1,638,339
-----------
ISRAEL-0.69%
Koor Industries Ltd...... 13,118 1,133,783
Koor Industries Ltd.
ADR##................... 20,500 356,187
-----------
TOTAL ISRAEL (Cost $1,689,175).......... 1,489,970
-----------
MEXICO-4.41%
Cementos Apasco, S.A. de
C.V..................... 325,000 2,154,855
Cementos Mexicanos, S.A.
de C.V., Class B........ 955,925 3,472,015
Cementos Mexicanos, S.A.
de C.V. CPO............. 1,171,400 3,890,806
-----------
TOTAL MEXICO (Cost $13,111,691)......... 9,517,676
-----------
PHILIPPINES-0.18%
Hi Cement Corporation
(Cost $404,154)......... 1,164,000 394,111
-----------
THAILAND-2.33%
PTT Exploration and
Production Public
Company Foreign
Registered.............. 135,000 1,987,432
Siam Cement Co. Ltd.
Foreign Registered...... 87,200 3,031,797
-----------
TOTAL THAILAND (Cost $4,666,937)........ 5,019,229
-----------
TOTAL OTHER ESSENTIAL SERVICES (Cost
$22,223,200)........................... 18,687,960
-----------
INVESTMENT COMPANIES IN EMERGING COUNTRIES-1.39%
INDIA-0.68%
India Special Situations
Fund Ltd.*+ (Cost
$2,000,000)............. 2,000 1,473,340
-----------
</TABLE>

- - --------------------------------------------------------------------------------
13
<PAGE>
- - --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

TOTAL INVESTMENTS-92.67%
(Cost $185,648,450) (Notes A,D)........ 199,921,203
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES-7.33%...................... 15,813,817
-----------
NET ASSETS-100.00%...................... $215,735,020
-----------
-----------
- - ---------------------------------------------------------
* Not readily marketable security.
** Effective yield on the date of purchase.
+ Security is non-income producing.
++ SEC Rule 144A security. Such securities are traded
only among "qualified institutional buyers."
=/= Restricted security (See Note F).
# As of November 30, 1996, the Fund committed to
investing additional capital of $62,005 in The
Renaissance Fund.
## Security or a portion thereof is out on loan.
(a) With an additional 30 warrants attached, expiring
06/20/01, with no market value.
(b) Includes 210,283 warrants, expiring 11/28/97, with a
market value of $183,998.
ADR American Depositary Receipts.
ADS American Depositary Shares.
CLP Chilean Pesos.
CPO Ordinary Participation Certificates.
GDR Global Depositary Receipts.
ON Ordinary Shares.
PN Preferred Shares.
USD United States Dollars.
</TABLE>

- - --------------------------------------------------------------------------------
See accompanying notes to financial statements.
14
<PAGE>
- - --------------------------------------------------------------------------------

THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES - NOVEMBER 30, 1996
- - --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost
$185,648,450) (Note A)................. $199,921,203
Cash (including $237,338 of foreign
currencies with a cost of $237,281)
(Note A)............................... 15,664,096
Receivables:
Dividends............................. 439,427
Investments sold...................... 324,406
Interest.............................. 49,144
Prepaid expenses and other assets....... 27,514
------------
Total Assets............................ 216,425,790
------------

LIABILITIES
Payables:
Advisory fee (Note B)................. 465,907
Administration fees (Note B).......... 42,246
Other accrued expenses................ 182,617
------------
Total Liabilities....................... 690,770
------------
NET ASSETS (applicable to 16,107,169
shares of common stock outstanding)
(Note C)............................... $215,735,020
------------
------------

NET ASSET VALUE PER SHARE ($215,735,020
DIVIDED BY 16,107,169)................ $13.39
------------
------------

NET ASSETS CONSIST OF
Capital stock, $0.001 par value;
16,107,169 shares issued and
outstanding (100,000,000 shares
authorized)............................ $ 16,107
Paid-in capital......................... 223,751,241
Undistributed net investment income..... 1,154,898
Accumulated net realized loss on
investments and foreign currency
related transactions................... (23,456,233)
Net unrealized appreciation in value of
investments and translation of other
assets and liabilities denominated in
foreign currencies..................... 14,269,007
------------
Net assets applicable to shares
outstanding............................ $215,735,020
------------
------------
</TABLE>

- - --------------------------------------------------------------------------------
See accompanying notes to financial statements.
15
<PAGE>
- - --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

STATEMENT OF OPERATIONS - FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1996
- - --------------------------------------------------------------------------------

<TABLE>
<S> <C>
INVESTMENT INCOME
Income (Note A):
Dividends............................. $ 5,425,847
Interest.............................. 699,458
Less: Foreign taxes withheld.......... (476,245)
-----------
Total Investment Income............... 5,649,060
-----------
Expenses:
Investment advisory fees (Note B)..... 2,707,619
Administration fees (Note B).......... 327,259
Custodian fees........................ 283,622
Accounting fees....................... 147,526
Printing.............................. 99,798
Audit and legal fees.................. 56,884
Insurance............................. 41,185
Directors' fees....................... 30,295
NYSE listing fees..................... 24,823
Transfer agent fees................... 21,861
Amortization of organizational
costs................................ 9,994
Other................................. 17,431
-----------
Total Expenses........................ 3,768,297
-----------
Net Investment Income................. 1,880,763
-----------

NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
RELATED TRANSACTIONS
Net realized loss from:
Investments........................... (9,406,404)
Foreign currency related
transactions......................... (378,793)
Net change in unrealized depreciation in
value of investments and translation of
other assets and liabilities
denominated in foreign currencies...... 38,167,737
-----------
Net realized and unrealized gain on
investments and foreign currency
related transactions................... 28,382,540
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................ $30,263,303
-----------
-----------
</TABLE>

- - --------------------------------------------------------------------------------
See accompanying notes to financial statements.
16
<PAGE>
- - --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

STATEMENT OF CHANGES IN NET ASSETS
- - --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
For the Fiscal Years Ended
November 30,
-----------------------------
1996 1995
<S> <C> <C>
-----------------------------

INCREASE/(DECREASE) IN NET ASSETS
Operations:
Net investment income................. $ 1,880,763 $ 1,268,005
Net realized loss on investments and
foreign currency related
transactions......................... (9,785,197) (9,958,681)
Net change in unrealized
appreciation/(depreciation) in value
of investments and translation of
other assets and liabilities
denominated in foreign currencies.... 38,167,737 (31,753,559)
------------ ------------
Net increase/(decrease) in net
assets resulting from operations... 30,263,303 (40,444,235)
------------ ------------
Dividends and distributions to
shareholders:
Net investment income................. (1,449,645) (512,808)
Net realized gain on investments and
foreign currency related
transactions......................... -- (292,550)
------------ ------------
Total dividends and distributions to
shareholders....................... (1,449,645) (805,358)
------------ ------------
Total increase/(decrease) in net
assets............................. 28,813,658 (41,249,593)
------------ ------------

NET ASSETS
Beginning of year....................... 186,921,362 228,170,955
------------ ------------
End of year (including undistributed net
investment income of $1,154,898 and
$1,126,340, respectively).............. $215,735,020 $186,921,362
------------ ------------
------------ ------------
</TABLE>

- - --------------------------------------------------------------------------------
See accompanying notes to financial statements.
17
<PAGE>
- - --------------------------------------------------------------------------------

THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

FINANCIAL HIGHLIGHTS
- - --------------------------------------------------------------------------------

Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from information provided in the financial statements and market price
data for the Fund's shares.
- - --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
For the Fiscal Years
Ended
November 30, For the Period
---------------------- December 29, 1993*
through
1996 1995 November 30, 1994
<S> <C> <C> <C>
--------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period........................ $11.60 $14.17 $13.89**
--------- ---------- ----------
Net investment income/(loss)................................ 0.12 0.07 (0.01)
Net realized and unrealized gain/(loss) on investments and
foreign currency related transactions...................... 1.76 (2.59) 0.29
--------- ---------- ----------
Net increase/(decrease) in net assets resulting from
operations................................................. 1.88 (2.52) 0.28
--------- ---------- ----------
Dividends and distributions to shareholders:
Net investment income..................................... (0.09) (0.03) --
Net realized gain on foreign currency related
transactions............................................. -- (0.02) --
--------- ---------- ----------
Total dividends and distributions to shareholders........... (0.09) (0.05) --
--------- ---------- ----------
Net asset value, end of period.............................. $13.39 $11.60 $14.17
--------- ---------- ----------
--------- ---------- ----------
Market value, end of period................................. $10.75 $9.75 $11.88
--------- ---------- ----------
--------- ---------- ----------
Total investment return(a).................................. 11.11% (17.49)% (14.87)%
--------- ---------- ----------
--------- ---------- ----------

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)..................... $215,735 $186,921 $228,171
Ratio of expenses to average net assets..................... 1.81% 1.83% 2.02%(b)#
Ratio of net investment income/(loss) to average net
assets..................................................... 0.90% 0.65% (0.13)%(b)
Portfolio turnover rate..................................... 23.89% 13.73% 24.63%(c)
Average commission rate per share(d)........................ $0.0009 -- --
</TABLE>

- - ---------------------------------------------------------------------------
* Commencement of investment operations.
** Initial public offering price of $15.00 per share less underwriting
discount of $1.05 per share and offering expenses of $0.06 per share.
# For the calendar year ended December 31, 1994, the Brazilian Congress
imposed a 0.25% withholding tax on financial transactions. If
such tax had not been imposed, the ratio of expenses to average net
assets would have been 1.96% for the period December 29, 1993
through November 30, 1994.
(a) Total investment return at market value is based on the changes in
market price of a share during the period and assumes reinvestment
of dividends and distributions, if any, at actual prices pursuant to
the Fund's Dividend Reinvestment Plan. Total investment return does
not reflect brokerage commissions or initial underwriting discounts
and has not been annualized.
(b) Annualized.
(c) Not annualized.
(d) Disclosure is required for fiscal years beginning on or after
September 1, 1995. Represents average commission rate per share
charged to the Fund on purchases and sales of investments during the
period.

- - --------------------------------------------------------------------------------
See accompanying notes to financial statements.
18
<PAGE>
- - --------------------------------------------------------------------------------

THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

NOTES TO FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------

NOTE A. SIGNIFICANT ACCOUNTING POLICIES

The Emerging Markets Infrastructure Fund, Inc. (the "Fund") was incorporated in
Maryland on October 12, 1993 and commenced investment operations on December 29,
1993. The Fund is registered under the Investment Company Act of 1940, as
amended, as a closed-end, non-diversified management investment company.
Significant accounting policies are as follows:

PORTFOLIO VALUATION: Investments are stated at value in the accompanying
financial statements. All securities for which market quotations are readily
available are valued at the closing price quoted for the securities prior to the
time of determination (but if bid and asked quotations are available, at the
mean between the last current bid and asked prices). Securities that are traded
over-the-counter are valued at the mean between the current bid and the asked
prices, if available. All other securities and assets are valued at the fair
value as determined in good faith by the Board of Directors. Short-term
investments having a maturity of 60 days or less are valued on the basis of
amortized cost. The preparation of financial statements requires the use of
estimates by management, principally the valuation of non-publicly traded
securities. Accordingly, the Board of Directors has established general
guidelines for calculating fair value of non-publicly traded securities. At
November 30, 1996, the Fund held 8.6% of its net assets in securities valued in
good faith by the Board of Directors with an aggregate cost of $18,925,596 and
fair value of $18,586,059. The net asset value per share of the Fund is
calculated weekly, at the end of each month and at any other times determined by
the Board of Directors.

CASH: Deposits held at Brown Brothers Harriman & Co., the Fund's custodian, in a
variable rate account are classified as cash. At November 30, 1996, the interest
rate was 5.00% which resets on a daily basis. Amounts on deposit are generally
available on the same business day.

INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on the trade date. The cost of investments sold is determined by
use of the specific identification method for both financial reporting and
income tax purposes. Interest income is recorded on an accrual basis; dividend
income is recorded on the ex-dividend date.

TAXES: No provision is made for U.S. federal income or excise taxes as it is the
Fund's intention to continue to qualify as a regulated investment company and to
make the requisite distributions to its shareholders which will be sufficient to
relieve it from all or substantially all U.S. federal income and excise taxes.

At November 30, 1996, the Fund had a capital loss carryover of $18,862,433 of
which $1,079,127 expires in 2002, $12,947,038 expires in 2003, and $4,836,268
expires in 2004.

For U.S. federal income tax purposes, realized capital losses incurred after
October 31, 1996, within the fiscal year, are deemed to arise on the first day
of the following fiscal year. The Fund incurred and elected to defer such losses
of $4,593,800.

Income received by the Fund from sources within emerging countries and other
foreign countries may be subject to withholding and other taxes imposed by such
countries.

The Fund is subject to a 10% Chilean repatriation tax with respect to all
remittances from Chile in excess of original investment capital. For the fiscal
year ended November 30, 1996, the Fund incurred no such expense.

- - --------------------------------------------------------------------------------
19
<PAGE>
- - --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- - --------------------------------------------------------------------------------

FOREIGN CURRENCY TRANSLATIONS: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:

(I) market value of investment securities, assets and liabilities at the
current rate of exchange; and

(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.

The Fund does not isolate that portion of gains and losses in investments in
equity securities which is due to changes in the foreign exchange rates from
that which is due to change in market prices of equity securities. Accordingly,
realized and unrealized foreign currency gains and losses with respect to such
securities are included in the reported net realized and unrealized gains and
losses on investment transactions balances. However, the Fund does isolate the
effect of fluctuations in foreign exchange rates when determining the gain or
loss upon the sale or maturity of foreign currency denominated debt obligations
pursuant to U.S. federal income tax regulations, with such amount categorized as
foreign exchange gain or loss for both financial reporting and income tax
reporting purposes.

Net currency gains from valuing foreign currency denominated assets and
liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation/depreciation on investments, foreign currency holdings,
and other assets and liabilities denominated in foreign currencies.

Net realized foreign exchange losses represent foreign exchange gains and losses
from sales and maturities of debt securities, transactions in foreign currencies
and forward foreign currency contracts, exchange gains or losses realized
between the trade date and settlement dates on security transactions, and the
difference between the amounts of interest and dividends recorded on the Fund's
books and the U.S. dollar equivalent of the amounts actually received.

The Fund reports certain foreign currency related transactions and foreign taxes
withheld on security transactions as components of realized gains for financial
reporting purposes, whereas such components are treated as ordinary income for
U.S. federal income tax purposes.

SECURITIES LENDING: The market value of securities out on loan to brokers at
November 30, 1996, was $9,427,346, for which the Fund has received cash as
collateral of $9,945,333. Such cash collateral was reinvested into a repurchase
agreement which is in turn collateralized by U.S. Treasury Strips (interest-
only). Security loans are required at all times to have collateral at least
equal to 102% of the market value of the securities on loan; however, in the
event of default or bankruptcy by the other party to the agreement, realization
and/or retention of the collateral may be subject to legal proceedings.

During the fiscal year ended November 30, 1996, the Fund earned $43,352 in
securities lending income which is included in interest income in the Statement
of Operations.

DISTRIBUTIONS OF INCOME AND GAINS: The Fund distributes at least annually to
shareholders substantially all of its net investment income and net realized
short-term capital gains, if any. The Fund determines annually whether to
distribute any net realized long-term capital gains in excess of net realized
short-term capital losses, including capital loss carryovers, if any. An
additional distribution may be made to the extent necessary to avoid the payment
of a

- - --------------------------------------------------------------------------------
20
<PAGE>
- - --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- - --------------------------------------------------------------------------------
4% U.S. federal excise tax. Dividends and distributions to shareholders are
recorded by the Fund on the ex-dividend date.

The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for U.S.
federal income tax purposes due to U.S. generally accepted accounting
principles/tax differences in the character of income and expense recognition.

At November 30, 1996, the Fund reclassified $402,560 of foreign currency losses
to undistributed net investment income.

OTHER: Some countries require governmental approval for the repatriation of
investment income, capital or the proceeds of sales of securities by foreign
investors. In addition, if there is a deterioration in a country's balance of
payments or for other reasons, a country may impose temporary restrictions on
foreign capital remittances abroad. Amounts repatriated prior to the end of
specified periods may be subject to taxes as imposed by a foreign country.

The emerging countries' securities markets are substantially smaller, less
liquid and more volatile than the major securities markets in the United States.
A high proportion of the securities of many companies in emerging countries may
be held by a limited number of persons, which may limit the number of securities
available for investment by the Fund. The limited liquidity of emerging country
securities markets may also affect the Fund's ability to acquire or dispose of
securities at the price and time it wishes to do so.

The Fund, subject to local investment limitations, may invest up to 30% of its
assets in non-publicly traded equity securities which may involve a high degree
of business and financial risk and may result in substantial losses. Because of
the current absence of any liquid trading market for these investments, the Fund
may take longer to liquidate these positions than would be the case for publicly
traded securities. Although these securities may be resold in privately
negotiated transactions, the prices realized on such sales could be less than
those originally paid by the Fund. Further, companies whose securities are not
publicly traded may not be subject to the disclosure and other investor
protection requirements applicable to companies whose securities are publicly
traded.

NOTE B. AGREEMENTS

BEA Associates ("BEA") serves as the Fund's investment adviser with respect to
all investments. As compensation for its advisory services, BEA receives from
the Fund an annual fee, calculated weekly and paid quarterly, equal to 1.30% of
the Fund's average weekly net assets. For the fiscal year ended November 30,
1996, BEA earned $2,707,619 for advisory services. BEA also provides certain
administrative services to the Fund and is reimbursed by the Fund for costs
incurred on behalf of the Fund (up to $20,000 per annum). For the fiscal year
ended November 30, 1996, BEA was reimbursed $13,870 for administrative services
rendered to the Fund.

Bear Stearns Funds Management Inc. ("BSFM") serves as the Fund's U.S.
administrator. The Fund pays BSFM a fee for its services rendered that is
computed at an annual rate of 0.12% of the Fund's average weekly net assets. For
the fiscal year ended November 30, 1996, BSFM earned $250,542 for administrative
services.

The First National Bank of Boston, Sao Paulo ("Banco de Boston") and CELFIN
Administradora de Fondos de Inversion de Capital Extranjero S.A. ("Chilean
administrator") serve as the Fund's administrators with respect to Brazilian and
Chilean investments, respectively. Banco de Boston is paid for its services a
quarterly fee based on an annual rate of 0.10% of

- - --------------------------------------------------------------------------------
21
<PAGE>
- - --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- - --------------------------------------------------------------------------------
average month end Brazilian net assets of the Fund. In return for services
rendered, the Chilean administrator's fee is paid quarterly at an annual rate of
0.10% of the Fund's average weekly net assets in Chile, subject to certain
minimum annual fees and reimbursement for a predefined limit of their expenses.

NOTE C. CAPITAL STOCK

The authorized capital stock of the Fund is 100,000,000 shares of common stock,
$0.001 par value. Of the 16,107,169 shares outstanding at November 30, 1996, BEA
Associates owned 7,169 shares.

NOTE D. INVESTMENT IN SECURITIES

For U.S. federal income tax purposes, the cost of securities owned at November
30, 1996 was $185,655,029. Accordingly, the net unrealized appreciation of
investments (including investments denominated in foreign currencies) of
$14,266,174, was composed of gross appreciation of $32,455,210 for those
investments having an excess of value over cost and gross depreciation of
$18,189,036 for those investments having an excess of cost over value.

For the fiscal year ended November 30, 1996, total purchases and sales of
securities, other than short-term investments, were $47,386,980 and $63,150,772,
respectively.

NOTE E. CREDIT AGREEMENT

The Fund, along with 17 other U.S. regulated investment companies for which BEA
serves as investment adviser, has a credit agreement with The First National
Bank of Boston. The agreement provides that each fund is permitted to borrow an
amount equal to the lesser of $50,000,000 or 25% of the net assets of the fund.
However, at no time shall the aggregate outstanding principal amount of all
loans to any of the 18 funds exceed $50,000,000. The line of credit will bear
interest at (i) the greater of the bank's prime rate or the Federal Funds
Effective Rate plus 0.50% or (ii) the Adjusted Eurodollar Rate plus 1.50%. The
Fund had no amounts outstanding under the credit agreement during the fiscal
year ended November 30, 1996.

NOTE F. RESTRICTED SECURITIES

Certain of the Fund's investments are restricted as to resale and are valued at
the direction of the Fund's Board of Directors in good faith, at fair value,
after taking into consideration appropriate indications of value. The table
below shows the number of shares held, the acquisition dates, aggregate costs,
fair value as of November 30, 1996, share value of the securities and percentage
of net assets which the securities comprise.

<TABLE>
<CAPTION>
NUMBER OF ACQUISITION FAIR VALUE VALUE PER PERCENT OF
SECURITY SHARES DATES COST AT 11/30/96 SHARE NET ASSETS
- - -------------------------------------------- ------------- ----------- ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
The Renaissance Fund 160 03/30/94 $ 1,537,995 $ 1,523,596 $ 9,523 0.71
Superbowl Acquisition LDC 96 10/10/94 960,866 1,009,728 10,518 0.47
</TABLE>

The Fund may incur certain costs in connection with the disposition of the above
securities.

- - --------------------------------------------------------------------------------
22
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Directors
of The Emerging Markets Infrastructure Fund, Inc.:

We have audited the accompanying statement of assets and liabilities of The
Emerging Markets Infrastructure Fund, Inc., including the schedule of
investments, as of November 30, 1996 and the related statements of operations
for the year then ended, and changes in net assets for each of the two years
then ended and the financial highlights for each of the periods presented. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments held by the
custodians and issuers as of November 30, 1996. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Emerging Markets Infrastructure Fund, Inc., as of November 30, 1996 and the
results of its operations for the year then ended, the changes in its net assets
for each of the two years then ended and its financial highlights for each of
the periods presented, in conformity with generally accepted accounting
principles.

COOPERS & LYBRAND L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 15, 1997

- - --------------------------------------------------------------------------------
23
<PAGE>
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)

On March 29, 1996, the annual meeting of shareholders of The Emerging Markets
Infrastructure Fund, Inc. (the "Fund") was held and the following matters were
voted upon:

(1) To re-elect four directors to the Board of Directors of the Fund.

<TABLE>
<CAPTION>
NAME OF DIRECTOR FOR WITHHELD NON-VOTES
- - --------------------------------------------------------------------------------- ------------ --------- ----------
<S> <C> <C> <C>
Dr. Enrique R. Arzac* 13,355,019 411,359 2,340,791
Daniel Sigg 13,362,841 403,537 2,340,791
Martin M. Torino 13,340,449 425,929 2,340,791
Richard Watt 13,338,100 428,278 2,340,791
</TABLE>

- - ------------------------

* On February 13, 1996, the Board of Directors increased the size of the Fund's
Board of Directors to eight and Dr. Enrique R. Arzac was elected to fill the
newly created vacancy. The election of Dr. Arzac was submitted to the Fund's
shareholders for their ratification at the annual meeting of shareholders.

In addition to the directors elected at the meeting, Peter A. Gordon, James J.
Cattano and George W. Landau continue to serve as directors of the Fund.

(2) To ratify the selection of Coopers & Lybrand L.L.P. as independent
accountants for the fiscal year ending November 30, 1996.

<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTES
------------ --------- --------- ----------
<S> <C> <C> <C> <C>
13,356,924 305,831 103,623 2,340,791
</TABLE>

TAX INFORMATION (UNAUDITED)

The Fund is required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise its shareholders within 60 days of the Fund's fiscal year end
(November 30, 1996) as to the U.S. federal tax status of distributions received
by the Fund's shareholders in respect of such fiscal year. The $0.09 per share
dividend paid in respect of such fiscal year was derived entirely from net
investment income.

The Fund does not intend to make an election under Section 853 to pass through
foreign taxes paid by the Fund to its shareholders. This information is given to
meet certain requirements of the Internal Revenue Code of 1986, as amended.
Shareholders should refer to their Form 1099-DIV to determine the amount
includable on their respective tax returns for 1996.

Because the Fund's fiscal year is not the calendar year, notification will be
sent in respect of calendar year 1996. The notification, which will reflect the
amount to be used by calendar year taxpayers on their 1996 federal income tax
returns, will be made in conjunction with Form 1099-DIV and will be mailed in
January 1997.

Foreign shareholders will generally be subject to U.S. withholding tax on the
amount of their dividend. They will generally not be entitled to a foreign tax
credit or deduction for the withholding taxes paid by the Fund.

In general, dividends received by tax-exempt recipients (e.g., IRAs and Keoghs)
need not be reported as taxable income for U.S. federal income tax purposes.
However, some retirement trusts (e.g., corporate, Keogh and 403(b)(7) plans) may
need this information for their annual information reporting.

Shareholders are advised to consult their own tax advisers with respect to the
tax consequences of their investment in the Fund.

- - --------------------------------------------------------------------------------
24
<PAGE>
DESCRIPTION OF DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN

Pursuant to The Emerging Markets Infrastructure Fund, Inc.'s (the "Fund")
Dividend Reinvestment and Cash Purchase Plan (the "Plan"), each shareholder will
be deemed to have elected, unless the Fund's transfer agent, as the Plan Agent
(the "Plan Agent"), is otherwise instructed by the shareholder in writing, to
have all distributions, net of any applicable U.S. withholding tax,
automatically reinvested in additional shares of the Fund. Shareholders who do
not participate in the Plan will receive all dividends and distributions in
cash, net of any applicable U.S. withholding tax, paid in dollars by check
mailed directly to the shareholder by the Plan Agent, as dividend-paying agent.
Shareholders who do not wish to have dividends and distributions automatically
reinvested should notify the Plan Agent for the Fund at the address set forth
below. Dividends and distributions with respect to shares registered in the name
of a broker-dealer or other nominee (i.e. in "street name") will be reinvested
under the Plan unless such service is not provided by the broker or nominee or
the shareholder elects to receive dividends and distributions in cash. A
shareholder whose shares are held by a broker or nominee that does not provide a
dividend reinvestment program may be required to have his shares registered in
his own name to participate in the Plan. Investors who own shares of the Fund's
common stock registered in street name should contact the broker or nominee for
details concerning participation in the Plan.

Certain distributions of cash attributable to (a) some of the dividends and
interest amounts paid to the Fund and (b) certain capital gains earned by the
Fund that are derived from securities of certain emerging country issuers are
subject to taxes payable by the Fund at the time amounts are remitted. Such
taxes, if any, will be borne by the Fund and allocated to all shareholders in
proportion to their interests in the Fund.

The Plan Agent serves as agent for the shareholders in administering the Plan.
If the Board of Directors of the Fund declares an income dividend or a capital
gains distribution payable either in the Fund's common stock or in cash, as
shareholders may have elected, nonparticipants in the Plan will receive cash and
participants in the Plan will receive common stock to be issued by the Fund. If
the market price per share on the valuation date equals or exceeds net asset
value per share on that date, the Fund will issue new shares to participants
valued at net asset value or, if the net asset value is less than 95% of the
market price on the valuation date, then valued at 95% of the market price. If
net asset value per share on the valuation date exceeds the market price per
share on that date the Plan Agent, as agent for the participants, will purchase
shares of common stock on the open market, on the New York Stock Exchange or
elsewhere, for the participants' accounts. If, before the Plan Agent has
completed its purchases, the market price exceeds the net asset value per share,
the average per share purchase price paid by the Plan Agent may exceed the net
asset value per share, resulting in the acquisition of fewer shares than if the
dividend or distribution had been paid in shares issued by the Fund at net asset
value. If the market price exceeds the net asset value per share before the Plan
Agent has completed its purchases, the Plan Agent is permitted to cease
purchasing shares and the Fund may issue the remaining shares at a price equal
to the greater of (a) net asset value or (b) 95% of the then current market
price. In a case where the Plan Agent has terminated open market purchases and
the Fund has issued the remaining shares, the number of shares received by the
participant in respect of the cash dividend or distribution will be based on the
weighted average of prices paid for shares purchased in the open market and the
price at which the Fund issues remaining shares.

The valuation date is the dividend or distribution payment date or, if that date
is not a New York Stock Exchange trading day, the next preceding trading day. If
the Fund should declare an income dividend or capital gains distribution payable
only in cash, the Plan Agent will, as agent for the participants, buy Fund
shares in

- - --------------------------------------------------------------------------------
25
<PAGE>
DESCRIPTION OF DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (CONTINUED)

the open market, on the New York Stock Exchange or elsewhere, for the
participants' accounts on, or shortly after, the payment date.

Participants in the Plan have the option of making additional cash payments to
the Plan Agent, semiannually, in any amount from $100 to $3,000, for investment
in the Fund's common stock. The Plan Agent will use all funds received from
participants to purchase Fund shares in the open market on or about February 15
and August 15 of each year. Any voluntary cash payments received more than 30
days prior to these dates will be returned by the Plan Agent and interest will
not be paid on any uninvested cash payments. To avoid unnecessary cash
accumulations, and also to allow ample time for receipt and processing by the
Plan Agent, it is suggested that participants send in voluntary cash payments to
be received by the Plan Agent approximately 10 days before February 15 or August
15, as the case may be. A participant may withdraw a voluntary cash payment by
written notice, if the notice is received by the Plan Agent not less than 48
hours before the payment is to be invested. A participant's tax basis in his
shares acquired through this optional investment right will equal his cash
payments to the Plan, including any cash payments used to pay brokerage
commissions allocable to his acquired shares.

The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in the account, including information
needed by shareholders for personal and tax records. Shares in the account of
each Plan participant will be held by the Plan Agent in the name of the
participant and each shareholder's proxy will include those shares purchased
pursuant to the Plan.

In the case of a shareholder, such as a bank, broker or nominee, that holds
shares for others who are the beneficial owners, the Plan Agent will administer
the Plan on the basis of the number of shares certified from time to time by the
shareholder as representing the total amount registered in the shareholder's
name and held for the account of beneficial owners who are to participate in the
Plan.

There is no charge to participants for reinvesting dividends or capital gains
distributions payable in either shares or cash. The Plan Agent's fees for the
handling of reinvestment of such dividends and capital gains distributions will
be paid by the Fund. There will be no brokerage charges with respect to shares
issued directly by the Fund as a result of dividends or capital gains
distributions payable either in stock or in cash. However, each participant will
be charged by the Plan Agent a pro rata share of brokerage commissions incurred
with respect to the Plan Agent's open market purchases in connection with
voluntary cash payments made by the participant or the reinvestment of dividends
or capital gains distributions payable only in cash. Brokerage charges for
purchasing small amounts of stock for individual accounts through the Plan are
expected to be less than the usual brokerage charges for such transactions
because the Plan Agent will be purchasing stock for all participants in blocks
and prorating the lower commission thus obtainable. Brokerage commissions will
vary based on, among other things, the broker selected to effect a particular
purchase and the number of participants on whose behalf such purchase is being
made. The Fund cannot predict, therefore, whether the cost to a participant who
makes a voluntary cash payment will be less than if a participant were to make
an open market purchase of the Fund's common stock on his own behalf.

The receipt of dividends and distributions in the stock under the Plan will not
relieve participants of any income tax (including withholding tax) that may be
payable on such dividends or distributions.

Experience under the Plan may indicate that changes in the Plan are desirable.
Accordingly, the Fund and the Plan Agent reserve the right to terminate the Plan
as applied to any voluntary cash payments made and any

- - --------------------------------------------------------------------------------
26
<PAGE>
DESCRIPTION OF DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (CONTINUED)

dividend or distribution paid subsequent to notice of the termination sent to
the members of the Plan at least 30 days before the semiannual contribution
date, in the case of voluntary cash payments, or the record date for dividends
or distributions. The Plan also may be amended by the Fund or the Plan Agent,
but (except when necessary or appropriate to comply with applicable law, rules
or policies of a regulatory authority) only by at least 30 days' written notice
to members of the Plan. All correspondence concerning the Plan should be
directed to The First National Bank of Boston, Investor Relations Department,
P.O. Box 644, Mail Stop 45-02-09, Boston, Massachusetts 02102-0644 or by
telephone at 1-800-730-6001.

- - --------------------------------------------------------------------------------
27
<PAGE>
SUMMARY OF GENERAL INFORMATION

The Fund--The Emerging Markets Infrastructure Fund, Inc.--is a closed-end,
non-diversified management investment company whose shares trade on the New York
Stock Exchange. Its investment objective is long-term capital appreciation
through investments primarily in equity securities of infrastructure companies
in emerging countries. The Fund is managed and advised by BEA Associates
("BEA"). BEA is a diversified asset manager, handling equity, balanced, fixed
income, international and derivative based accounts. Portfolios include
international and emerging market investments, common stocks, taxable and
non-taxable bonds, options, futures and venture capital. BEA manages money for
corporate pension and profit-sharing funds, public pension funds, union funds,
endowments and other charitable institutions and private individuals. As of
September 30, 1996, BEA managed approximately $31.3 billion in assets.

SHAREHOLDER INFORMATION

The market price is published in: THE NEW YORK TIMES (daily) under the
designation "EmgMkt" and THE WALL STREET JOURNAL (daily), and BARRON'S (each
Monday) under the designation "EmergMktInfr". The Fund's New York Stock Exchange
trading symbol is EMG. Weekly comparative net asset value (NAV) and market price
information about The Emerging Markets Infrastructure Fund, Inc.'s shares are
published each Sunday in THE NEW YORK TIMES and each Monday in THE WALL STREET
JOURNAL and BARRON'S, as well as other newspapers, in a table called "Closed End
Funds."

THE BEA GROUP OF FUNDS

LITERATURE REQUEST - Call today for free descriptive information on the
closed-end funds or a prospectus on any of the open-end mutual funds listed
below. The prospectus contains more complete information, including fees,
charges and expenses, and should be read carefully before investing or sending
money.

<TABLE>
<S> <C> <C>
CLOSED-END FUNDS NYSE SYMBOL BEA ADVISOR FUNDS
SINGLE COUNTRY OPEN-END MUTUAL FUNDS
The Brazilian Equity Fund, Inc. BZL BEA Emerging Markets Equity Fund
The Chile Fund, Inc. CH BEA Global Telecommunications
Fund
The First Israel Fund, Inc. ISL BEA High Yield Fund
The Indonesia Fund, Inc. IF BEA International Equity Fund
The Portugal Fund, Inc. PGF
MULTIPLE COUNTRY
The Emerging Markets Telecommunications Fund, ETF
Inc.
The Latin America Equity Fund, Inc. LAQ
The Latin America Investment Fund, Inc. LAM
For shareholder information or a
copy
FIXED INCOME of a prospectus for any of the
BEA Income Fund, Inc. FBF open-end mutual funds please
call,
BEA Strategic Income Fund, Inc. FBI 1-800-401-2230.
For closed-end fund information Visit our website on the
Internet:
please call, 1-800-293-1232. http://www.beafunds.com
</TABLE>

- - --------------------------------------------------------------------------------
<PAGE>
DIRECTORS AND CORPORATE OFFICERS

Richard Watt Director,
Senior Vice President
and Chief Investment Officer

Dr. Enrique R. Arzac Director

James J. Cattano Director

Peter A. Gordon Director

George W. Landau Director

Daniel Sigg Director and
Senior Vice President

Martin M. Torino Director

Stephen M. Swift Senior Vice President and
Investment Officer

Paul P. Stamler Senior Vice President

Michael A. Pignataro Chief Financial Officer
and Secretary

Rachel D. Manney Vice President and Treasurer

Wendy S. Setnicka Assistant Treasurer

INVESTMENT ADVISER

BEA Associates
One Citicorp Center
153 East 53rd Street
New York, NY 10022

ADMINISTRATOR

Bear Stearns Funds Management Inc.
245 Park Avenue
New York, NY 10167

CUSTODIAN

Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109

SHAREHOLDER SERVICING AGENT

The First National Bank of Boston
P.O. Box 1865
Mail Stop 45-02-62
Boston, MA 02105-1865

INDEPENDENT ACCOUNTANTS

Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103

LEGAL COUNSEL

Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022

This report, including the financial statements herein, is sent to the
shareholders of the Fund for their information. It is not a
prospectus, circular or representation intended for use in the
purchase or sale of shares of the Fund or of any securities mentioned
in this report. [LOGO]

- - --------------------------------------------------------------------------------