EMERGING MARKETS INFRASTRUCTURE FUND INC, N-30D, 1998-07-31

EMERGING MARKETS INFRASTRUCTURE FUND INC
N-30D, 1998-07-31

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<PAGE>

[ART]
The Emerging Markets
Infrastructure Fund, Inc.
--------------------------
Semi-Annual Report
May 31, 1998

<PAGE>
CONTENTS

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

Portfolio Summary..................................................... 7

Schedule of Investments............................................... 9

Statement of Assets and Liabilities................................... 13

Statement of Operations............................................... 14

Statement of Changes in Net Assets.................................... 15

Statement of Cash Flows............................................... 16

Financial Highlights.................................................. 17

Notes to Financial Statements......................................... 18

Results of Annual Meeting of Shareholders............................. 23

Description of InvestLink-SM- Program................................. 24
</TABLE>

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<PAGE>
LETTER TO SHAREHOLDERS
July 10, 1998

DEAR SHAREHOLDER:

I am writing to report on the activities of The Emerging Markets Infrastructure
Fund, Inc. (the "Fund") for the six months ended May 31, 1998.

At May 31, 1998, the Fund's net asset value ("NAV") was $13.15 per share (net of
dividends and distributions paid of $0.15 per share), as compared to $14.69 on
November 30, 1997. Total net assets at May 31, 1998 were $211,858,746.

PERFORMANCE

For the period December 1, 1997 through May 31, 1998, the Fund's total return,
based on NAV and assuming the reinvestment of dividends and distributions, fell
9.3%. For comparative purposes, the Morgan Stanley Capital International
Emerging Markets Free Index (the "Index") declined 7.2% in the same period.

The Fund underperformed the Index during the period primarily as a result of
adverse stock selection in Latin America. Unfortunately, this was most prominent
in Brazil, which represents the Fund's largest country exposure. Brazilian
equities in general fared poorly due to a "contagion" effect from Asia and
rising investor discomfort with emerging equities as an asset class. Brazilian
infrastructure stocks additionally suffered from a combination of nervousness
about the upcoming Telecomunicacoes Brasileiras S.A. ("Telebras") privatization
and several somewhat disappointing privatizations in the electricity sector. To
a lesser extent, performance was also reduced by having minimal allocations to
South Africa and Greece, both of which were strong.

The most positive contributions to performance came from Eastern Europe,
particularly Russia, Poland and Hungary.

Longer-term performance has been considerably more favorable. From the
commencement of investment operations on December 29, 1993 through May 31, 1998,
the Fund's total return, based on NAV and assuming the reinvestment of dividends
and distributions, fell 2.1%. The Index declined 25.0% during this period.

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1
<PAGE>
LETTER TO SHAREHOLDERS

INVESTMENT PERSPECTIVE

The dominant influence on activity in global equity markets continues to be the
severe economic crisis plaguing most of Asia. Among emerging equity markets,
Asia's have certainly taken the worst beating thus far in 1998, with Latin
America not far behind.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
1998: STOCK PRICES FALLING IN ASIA ...
<S> <C>
(Morgan Stanley Capital International Emerging Markets Free Asia
Index, $US)
Year-to-date return -23.2%
January 170
170
168
161
155
151
144
142
137
142
151
150
153
161
160
159
154
152
155
157
156
February 157
164
173
184
180
183
186
187
193
193
186
181
177
181
184
191
191
190
192
190
March 195
199
203
198
194
187
187
186
189
190
190
194
194
192
193
195
196
200
198
201
200
201
April 198
197
194
191
189
191
193
193
196
195
194
191
191
187
187
186
187
186
184
185
182
May 182
180
181
181
182
180
173
173
171
172
169
163
165
165
161
161
165
167
166
163
160
156
June 154
152
146
145
147
144
143
141
140
134
133
131
127
126
132
138
135
131
130
131
131
129
129
130
Source: Bloomberg
</TABLE>

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
... AND LATIN AMERICA
<S> <C>
(Morgan Stanley Capital International Emerging Markets Free Latin America
Index, $US)
Year-to-date return -21.0%
January 1164
1164
1174
1174
1134
1107
1074
1014
1023
1037
1035
1018
1046
1068
1051
1029
1030
1016
1017
1027
1028
February 1024
1033
1060
1070
1069
1071
1071
1074
1081
1089
1077
1073
1063
1066
1061
1063
1064
1060
1061
1077
March 1082
1087
1103
1104
1098
1092
1110
1104
1103
1112
1116
1129
1127
1132
1134
1134
1149
1169
1159
1149
1157
1158
April 1154
1158
1155
1156
1139
1146
1133
1138
1139
1139
1143
1154
1155
1144
1148
1152
1153
1139
1130
1129
1086
May 1106
1113
1127
1127
1122
1120
1097
1091
1094
1074
1060
1050
1050
1059
1014
1017
1014
1010
1007
996
955
966
June 982
978
954
980
969
991
998
1000
990
956
940
923
891
892
938
914
926
920
938
933
909
898
904
919
Source: Bloomberg
</TABLE>

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2
<PAGE>
LETTER TO SHAREHOLDERS

Naturally, the plunge in Asian equity prices raises the question of whether
valuations in Asian infrastructure stocks have fallen to levels that warrant a
higher allocation. I discussed this topic in my last report as well, and it
continues to be highly relevant. My conclusion remains unchanged: it is not yet
the time to increase the Fund's holdings in Asian companies.

By way of illustration, the chart below compares the valuations of Emerging
Asian telecommunication companies ("telcos") to those in Latin America and
Europe according to a standard measure (I.E., company enterprise value as a
multiple of cash flow). The data, produced by a respected research source,
indicate that, even with the sharp decline in Asian equity prices, valuations of
Asian telcos are actually higher (and meaningfully so) than those in Latin
America and much closer to those of the fully developed North American market. I
am thus persuaded to avoid most Asian exposure. I also tend to believe that the
extent of the crisis in Emerging Asia may not be fully captured in these
estimates.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
ASIAN TELCOS STILL OVERVALUED*
<S> <C> <C>
(EV/EBITDA 1998E)
Latin America Emerging Asia North America
5.0 7.6 8.4
* Prices as of 7/1/98
Source: Morgan Stanley Dean Witter
</TABLE>

PORTFOLIO STRUCTURE

TOP 10 HOLDINGS, BY ISSUER *

<TABLE>
<CAPTION>
PERCENT OF
HOLDING COUNTRY NET ASSETS
<C> <S> <C> <C>
1. Sabesp Brazil 6.8
2. Elektrim Eastern Europe 4.7
3. Global TeleSystems Grp Eastern Europe 4.6
4. PEC Israel Economic Corp Israel 3.5
5. Cimpor Portugal 2.9
6. Iberdrola Spain 2.5
7. MOL Magyar O. es G. Hungary 2.4
8. CANTV Venezuela 2.3
9. COPEL Brazil 2.2
10. EDC Venezuela 2.1
</TABLE>

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3
<PAGE>
LETTER TO SHAREHOLDERS

* Company names are abbreviations of those found in
the chart on page 8.

Given today's environment, I am structuring the portfolio to emphasize
geographical diversification and high-quality stocks. These are clearly
reflected in the Fund's broad range of country allocations and stock selections.
Even after deciding to minimize exposure to Asia, I am able to prudently
diversify the portfolio across a wide variety of nations in Latin America and
Eastern Europe.

I would now like to discuss three companies that are representative of my
current approach to the portfolio. This time around, my selections are cement
makers that share a general location in the Mediterranean area, clearly
indicating that the cloud hanging over Asian stocks need not obscure
opportunities elsewhere in the emerging world.

CIMPOR-CIMENTOS DE PORTUGAL, S.G.P.S., S.A. ("CIMPOR") is Portugal's dominant
producer both of cement (I.E., a 60% market share) and ready-made concrete, as
well as one of the 10 largest cement makers worldwide. The Portuguese government
privatized it beginning in June 1994 with the initial public offering of a 20%
stake and sold an additional 45% in October 1996. A third sale, of 25%, was
completed in mid-May 1998 and left the government holding a token 10% "golden
share." With 90% of its shares now publicly traded, Cimpor is one of the most
liquid industrial companies listed in Portugal.

My investment thesis for Cimpor is quite simple. Domestic demand is thriving,
but is projected to slow down early in the next century. Cimpor recognized this
some time ago and planned well in advance to expand its geographical reach. The
steps that it is taking now to build up its overseas operations (I.E., Brazil,
Morocco and Mozambique), then, should place it in an excellent position to grow
when the picture at home becomes less rosy.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
COUNTRY BREAKDOWN
(AS A PERCENT OF NET ASSETS)
<S> <C>

Other* 28.25%
Argentina 3.66%
Brazil 14.72%
Chile 5.51%
Eastern Europe 10.61%
Hungary 5.40%
India 4.57%
Israel 5.52%
Mexico 7.66%
Portugal 2.93%
Russia 6.79%
Venezuela 4.38%
* Other includes Canada, Republic of China, Colombia, Egypt, Global, Greece,
Hong Kong, Jamaica, Republic of Korea, Netherlands, Pakistan, Peru, Spain, Turkey, United Kingdom and Cash & Cash
Equivalents.
</TABLE>

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4
<PAGE>
LETTER TO SHAREHOLDERS

Additional strengths for Cimpor are its forward-thinking management team, sound
financial condition, higher-than-industry profit margins and strict attention to
cost-efficiency. Overall, I see the future as bright for the company and its
shareholders.

TITAN CEMENT COMPANY S.A. ("TITAN") is one of two Greek companies that dominate
Greece's cement market and among the most liquid Greek stocks. Although, like
Cimpor, its domestic and overseas markets are strong and should remain so going
forward, I see Titan as a macroeconomic play on Greece as well as Europe more
generally.

The key to Titan's domestic prospects is the Greek interest-rate environment.
Rates have been trending downward for the last few years, most recently as part
of the interest-rate convergence required for the start of the European Monetary
Union in 1999. This, in turn, has driven demand for cement in three ways:
overall economic buoyancy; vibrant growth in new construction activity,
particularly housing; and rapid expansion in the home mortgage business. The
environment for cement production in Greece also benefits from the nation's
high-quality limestone deposits, relatively efficient manufacturing operations
and proximity to deep-sea port facilities.

Several company-specific characteristics also speak well for Titan. Its sales
are balanced nearly evenly between Greece and overseas (mostly the U.S., along
with Europe and the Middle East), providing regional diversification. Most of
its costs are denominated in the DRACHMA, whose weakness is positive for
exports. Financial condition is cash-positive and otherwise excellent.

My last highlighted company is SUEZ CEMENT COMPANY ("SUEZ") of Egypt, which I
like not simply for its healthy business outlook, but also for its status as
Egypt's most liquid stock and one of the few Egyptian stocks whose shares trade
internationally.

A brief summary of Suez's strengths is impressive. It is the most profitable
and, by several measures, the most efficient of Egypt's cement producers. Egypt
is the only North African nation whose cement market compares in size with other
large Mediterranean markets such as Turkey, Spain and Italy. Domestic demand
outstrips supply, furthermore, essentially guaranteeing that Suez will sell
everything it can make. Finally, the cement sector is in the forefront of the
privatization process in Egypt, which should serve to enhance Suez's valuation
over the next few years.

OUTLOOK

Given both the high level of volatility in emerging equity markets and the lack
of any substantive evidence suggesting that the Asian economic crisis is likely
to end soon, I believe that a cautious investment stance is most appropriate in
the near term. Infrastructure stocks in most emerging markets are typically
viewed as proxies for their respective markets and, thus, should be most
influenced by bigger-picture considerations that outweigh individual-company
fundamentals.

With this in mind, I have raised the Fund's cash position to a very high level
(I.E., about 13% of total assets) and intend to act with great patience and
selectivity in making new purchases. Additionally, valuations of most Asian
companies are unattractively high, while those of Latin American companies are
comparatively low but, because of the risk of further "contagion" from Asia, may
fall even lower.

- --------------------------------------------------------------------------------
5
<PAGE>
LETTER TO SHAREHOLDERS

On a more positive note, I expect that the long-awaited privatization of
Telecomunicacoes Brasileiras S.A. ("Telebras") will take place within the next
30-60 days, as the Brazilian government has promised. The growing level of
interest in the process shown by many of the world's most prominent
telecommunications providers is an encouraging reminder of the great potential
offered by investment in emerging market infrastructure stocks. I believe that
the results of the Telebras sale should have favorable implications for the
valuations of telecom stocks throughout the emerging market universe.

Sincerely yours,

[SIGNATURE]
Richard W. Watt
Chief Investment Officer *

FROM BEA ASSOCIATES:

Like other financial and business organizations, the Fund and its portfolio
could be adversely affected if the computer systems they rely on do not properly
process date-related information and data involving the years 2000 and after. We
at BEA Associates are taking steps that we believe are reasonable to address
this problem in our own computer system and are seeking assurances that
comparable steps are being taken by the Fund's other major service providers.
BEA Associates is also attempting to evaluate the potential impact of this
problem on the issues of investment securities that the portfolio purchases. At
this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact on the Fund and portfolio.

- --------------------------------------------------------------------------------
* Richard W. 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 formerly was associated with Gartmore Investment Limited in London,
where he was head of emerging markets investments and research. Before joining
Gartmore Investment Limited 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
President, Chief Investment Officer and a Director of the Fund. He also is
President, Chief Investment Officer and a Director of The Brazilian Equity Fund,
Inc., The Chile Fund, Inc., The Emerging Markets Telecommunications Fund, Inc.,
The First Israel Fund, Inc., The Latin America Equity Fund, Inc., The Latin
America Investment Fund, Inc. and The Portugal Fund, Inc.

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6
<PAGE>
- --------------------------------------------------------------------------------

THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

PORTFOLIO SUMMARY - AS OF MAY 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
SECTOR ALLOCATION

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS

<S> <C> <C>
5/31/98 11/30/97
Cellular Communications 5.60% 6.16%
Chemicals 1.96% 0.00%
Electric Distribution 12.23% 20.61%
Electric Generation 10.11% 7.81%
Gas & Oil 9.32% 13.05%
Infrastructure & Construction 11.28% 11.52%
Investment Companies 8.69% 5.40%
Local and/or Long Distance Telephone
Service 6.64% 4.66%
Other Infrastructure 8.08% 8.26%
Partnerships 1.93% 1.34%
Steel 3.32% 4.39%
Telecommunications 8.03% 7.00%
Cash & Cash Equivalents 12.81% 9.80%
</TABLE>

GEOGRAPHIC ASSET BREAKDOWN

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
AS A PERCENT OF NET ASSETS

<S> <C> <C>
5/31/98 11/30/97
Africa 2.42% 1.68%
Asia 6.27% 10.82%
Caribbean 0.87% 0.68%
Eastern Europe 22.81% 12.60%
Europe 9.96% 2.90%
Latin America 38.32% 50.96%
Middle East 5.71% 8.39%
North America 1.15% 0.00%
Global 0.56% 3.49%
Cash & Cash Equivalents 11.93% 8.48%
</TABLE>

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7
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

PORTFOLIO SUMMARY - AS OF MAY 31, 1998 (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>
5/31/98 11/30/97
Argentina 3.66% 3.77%
Brazil 14.72% 20.86%
Chile 6.39% 11.25%
Eastern Europe 10.61% 6.48%
Hong Kong 1.02% 4.63%
Hungary 5.40% 1.31%
India 4.56% 2.20%
Israel 5.52% 7.87%
Mexico 7.65% 9.71%
Portugal 2.93% 0.00%
Russia 6.79% 4.80%
Spain 2.49% 0.00%
Venezuela 4.39% 3.20%
Global 0.56% 3.49%
Other 11.38% 11.95%
</TABLE>

TOP 10 HOLDINGS, BY ISSUER

<TABLE>
<CAPTION>
Percent of Net
Holding Sector Country/Region Assets
<C> <S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
1. Companhia de Saneamento Basico do Estado de Sao Paulo Infrastructure &
Construction Brazil 6.8
- --------------------------------------------------------------------------------------------------------------------------------
2. Elektrim Spolka Akcyjna S.A. Electric Distribution Eastern Europe 4.7
- --------------------------------------------------------------------------------------------------------------------------------
3. Global TeleSystems Group, Inc. Cellular Communications Eastern Europe 4.6
- --------------------------------------------------------------------------------------------------------------------------------
4. PEC Israel Economic Corp. Infrastructure &
Construction Israel 3.5
- --------------------------------------------------------------------------------------------------------------------------------
5. Cimpor-Cimentos de Portugal, S.G.P.S., S.A. Other Infrastructure Portugal 2.9
- --------------------------------------------------------------------------------------------------------------------------------
6. Iberdrola S.A. Electric Generation Spain 2.5
- --------------------------------------------------------------------------------------------------------------------------------
7. MOL Magyar Olaj-es Gazipari Rt. Gas & Oil Hungary 2.4
- --------------------------------------------------------------------------------------------------------------------------------
8. Compania Anonima Nacional Telefonos de Venezuela Telecommunications Venezuela 2.3
- --------------------------------------------------------------------------------------------------------------------------------
9. Companhia Paranaense de Energia Electric Generation Brazil 2.2
- --------------------------------------------------------------------------------------------------------------------------------
10. C.A. La Electricidad de Caracas, SAICA-SACA Electric Generation Venezuela 2.1
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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

SCHEDULE OF INVESTMENTS - MAY 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
<S> <C> <C>
- --------------------------------------------------------------------
EQUITY OR EQUITY-LINKED SECURITIES-86.99%
EQUITY OR EQUITY-LINKED SECURITIES OF INFRASTRUCTURE COMPANIES IN
EMERGING COUNTRIES-67.74%
ARGENTINA-2.75%
Camuzzi Argentina S.A.*+................ 1,729,347 $ 3,289,218
Transportadora de Gas del Sur S.A.
ADR.................................... 237,106 2,534,070
-----------
TOTAL ARGENTINA (Cost $4,932,800)...................... 5,823,288
-----------
BRAZIL-14.72%
Companhia de Gas de Sao Paulo PN........ 47,065,631 3,580,302
Companhia de Saneamento Basico do Estado
de Sao Paulo ON........................ 85,155,000 14,436,188
Companhia Energetica de Brasilia PNA.... 33,828,000 1,441,054
Companhia Energetica de Brasilia PNB.... 18,744,638 749,623
Companhia Paranaense de Energia ADR..... 176,400 1,752,975
Companhia Paranaense de Energia PNB+.... 282,254,200 2,871,006
Companhia Paulista de Forca e Luz ON.... 164,577 13,879
Espirito Santo Centrais Eletricas....... 30,700 2,402,353
Telecomunicacoes Brasileiras S.A. PN
ADR.................................... 28,250 3,012,156
Telecomunicacoes de Sao Paulo S.A. PN... 18,102 3,871
Telesp Celular S.A. PNB+................ 18,102 1,668
Trafo Equipamentos Electricos S.A.
PN+.................................... 509,800 921,873
-----------
TOTAL BRAZIL (Cost $40,928,612)........................ 31,186,948
-----------
CHILE-5.31%
Besalco S.A............................. 404,205 932,269
Chilectra S.A. ADS ++................... 39,828 240,586
Compania de Consumidores de Gas de
Santiago S.A........................... 138,945 378,455

<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
CHILE (CONTINUED)
Compania de Petroleos de Chile S.A...... 454,584 $ 1,263,149
Compania de Telecomunicaciones de Chile
S.A., Class A.......................... 197,799 1,077,521
Compania Electrica del Rio Maipo S.A.... 1,990,540 1,005,654
Empresa Electrica Pehuenche S.A......... 1,032,141 770,847
Empresa Nacional de Electricidad S.A.... 2,692,853 1,384,135
Empresas Emel S.A....................... 84,328 1,444,829
Enersis S.A............................. 2,990,000 1,490,895
Sociedad Austral de Electricidad S.A.... 61,355 1,253,381
-----------
TOTAL CHILE (Cost $13,330,772)......................... 11,241,721
-----------
EASTERN EUROPE-10.61%
Elektrim Spolka Akcyjna S.A............. 751,805 9,884,804
Global TeleSystems Group, Inc.*+........ 284,018 9,793,278
SPT Telecom a.s......................... 21,770 2,797,709
-----------
TOTAL EASTERN EUROPE
(Cost $11,428,763).................................... 22,475,791
-----------
EGYPT-0.41%
Tourak Cement
(Cost $907,873)........................ 44,751 866,487
-----------
GREECE-1.33%
Titan Cement Company S.A. (Cost
$2,921,580)............................ 37,500 2,823,535
-----------
HONG KONG-1.02%
Cheung Kong Infrastructure Holdings..... 470,800 1,045,007
China Telecom (Hong Kong) Ltd.+......... 622,000 1,107,704
-----------
TOTAL HONG KONG (Cost $2,621,478)...................... 2,152,711
-----------
HUNGARY-3.44%
Magyar Tavkozlesi Rt. ADR............... 76,655 2,146,340
</TABLE>

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

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
HUNGARY (CONTINUED)
MOL Magyar Olaj-es Gazipari Rt. GDR+.... 223,900 $ 5,138,505
-----------
TOTAL HUNGARY (Cost $7,153,819)........................ 7,284,845
-----------
INDIA-3.50%
Bharat Heavy Electricals Ltd............ 135,000 1,168,487
Hindustan Petroleum Corp................ 100,600 886,439
Mahanagar Telephone Nigam Ltd. GDR++.... 236,000 3,097,500
Morgan Stanley India Investment Fund,
Inc.+.................................. 281,900 2,255,200
-----------
TOTAL INDIA (Cost $7,773,129).......................... 7,407,626
-----------
ISRAEL-4.94%
Geotek Communications, Inc.+............ 19,223 7,209
Geotek Communications, Inc., Convertible
Preferred Series M, 8.50%*............. 100 48,579
Geotek Communications, Inc., Convertible
Preferred Series N*(a)................. 1,584 121,182
Kardan Technology Ventures L.P.*+#...... 250,000 250,000
Nexus Telecommunication Systems Ltd.
(units)+(b)............................ 210,283 1,478,552
PEC Israel Economic Corp.+.............. 330,951 7,322,291
Superbowl Acquisition LDC+++............ 96 1,241,472
-----------
TOTAL ISRAEL (Cost $11,482,867)........................ 10,469,285
-----------
JAMAICA-0.87%
Jamaican Assets I L.P.* (Cost
$1,600,000)............................ 1,600,000 1,841,680
-----------
MEXICO-3.25%
Empresas ICA Sociedad Controladora, S.A.
de C.V. ADR............................ 268,260 2,783,198
Telefonos de Mexico, S.A. de C.V. ADR... 86,300 4,093,856
-----------
TOTAL MEXICO (Cost $8,778,120)......................... 6,877,054
-----------
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
PAKISTAN-0.19%
Hub Power Co. (Cost $1,209,434)......... 957,600 $ 406,125
-----------
PERU-0.67%
Ferreyros S.A........................... 75,000 94,012
Ontario-Quinta A.V.V.*.................. 1,198,129 1,318,727
-----------
TOTAL PERU (Cost $1,324,727)........................... 1,412,739
-----------
REPUBLIC OF CHINA-0.67%
Huaneng Power International, Inc.+##
(Cost $2,030,890)...................... 81,700 1,419,538
-----------
REPUBLIC OF KOREA-0.02%
Samsung Display Devices Co. (Cost
$46,866)............................... 1,505 53,357
-----------
RUSSIA-6.79%
Lukoil Oil Co ADR....................... 33,500 1,426,890
Mosenergo ADR........................... 540,900 3,789,301
PLD Telekom, Inc.+...................... 465,550 3,273,398
Rostelecom ADR.......................... 209,100 3,214,913
Unified Energy Systems ADR.............. 75,000 1,318,988
Unified Energy Systems GDR.............. 77,000 1,354,161
-----------
TOTAL RUSSIA (Cost $21,724,137)........................ 14,377,651
-----------
SPAIN-2.49%
Iberdrola S.A. (Cost $4,343,417)........ 320,354 5,284,176
-----------
TURKEY-0.02%
Netas Northern Electric Telekomunikasyon
A.S.+ (Cost $66,037)................... 163,400 48,077
-----------
VENEZUELA-4.38%
C.A. La Electricidad de Caracas,
SAICA-SACA............................. 7,004,072 4,517,496
Compania Anonima Nacional Telefonos de
Venezuela ADR.......................... 154,900 4,772,856
-----------
TOTAL VENEZUELA (Cost $10,480,062)..................... 9,290,352
-----------
GLOBAL-0.36%
Emerging Markets Ventures, L.P.*+#...... 771,169 771,169
</TABLE>

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

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
GLOBAL (CONTINUED)
International Wireless Communications,
Inc., Series D*+....................... 220,120 $ 0
International Wireless Communications,
Inc., Series F*+....................... 15,440 0
International Wireless Communications,
Inc., Warrants (expiring 12/31/98)*+... 1,240 0
International Wireless Communications,
Inc., Warrants (expiring 06/29/05)*+... 1 0
-----------
TOTAL GLOBAL (Cost $2,364,199)......................... 771,169
-----------
TOTAL EMERGING COUNTRIES
(Cost $157,449,582)................................... 143,514,155
-----------
EQUITY SECURITIES OF NON-INFRASTRUCTURE COMPANIES-1.96%
HUNGARY-1.96%
Borsodchem GDR (Cost $4,800,100)........ 151,100 4,146,924
-----------
EQUITY SECURITIES OF INFRASTRUCTURE COMPANIES IN DEVELOPED
COUNTRIES-7.27%
CANADA-1.14%
Bell Canada International Inc.+ (Cost
$2,339,718)............................ 94,400 2,419,000
-----------
NETHERLANDS-1.76%
Ispat International NV+ (Cost
$4,508,428)............................ 155,000 3,729,688
-----------
PORTUGAL-2.93%
Cimpor-Cimentos de Portugal, S.G.P.S.,
S.A. (Cost $4,265,531)................. 162,300 6,212,317
-----------
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
UNITED KINGDOM-1.44%
Societe General Ladenburg Thalmann
Ukraine Fund Limited (Cost
$3,484,800)............................ 36,000 $ 3,042,000
-----------
TOTAL DEVELOPED COUNTRIES
(Cost $14,598,477).................................... 15,403,005
-----------
EQUITY SECURITES OF COMPANIES PROVIDING OTHER ESSENTIAL SERVICES IN
THE DEVELOPMENT OF AN EMERGING COUNTRY'S INFRASTRUCTURE-10.02%
ARGENTINA-0.91%
Exxel Capital Partners*# (Cost
$1,926,338)............................ 1,926,338 1,926,338
-----------
CHILE-0.20%
Puerto Ventanas S.A. (Cost $733,058).... 488,453 429,173
-----------
COLOMBIA-0.84%
Cementos Diamante S.A. ADS+............. 127,900 1,247,025
Cementos Paz del Rio S.A. ADR+.......... 41,635 532,204
-----------
TOTAL COLOMBIA (Cost $1,676,554)....................... 1,779,229
-----------
EGYPT-2.01%
Nile Growth Company..................... 200,000 1,600,000
Paints & Chemicals Industries........... 50,000 462,500
Suez Cement Company..................... 112,000 2,200,800
-----------
TOTAL EGYPT (Cost $5,228,450).......................... 4,263,300
-----------
INDIA-1.07%
India Special Situations Fund Ltd.*+
(Cost $2,000,000)...................... 2,000 2,259,040
-----------
ISRAEL-0.58%
The Renaissance Fund LDC=/= (Cost
$1,649,571)............................ 160 1,229,906
-----------
MEXICO-4.41%
Cementos Apasco, S.A. de C.V............ 336,100 2,054,643
Cementos Mexicanos, S.A. de C.V., Class
B...................................... 811,425 3,984,882
</TABLE>

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

No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
CHILEAN MUTUAL FUNDS-0.64%
Bice Manager Investment Fund............ 158,255 $ 407,354
Fondo Mutuo Corp Selecto................ 193,382 485,643
Fondo Mutuo Santander................... 4,957 21,981
Fondo Mutuo Security Check.............. 100,300 444,069
-----------
TOTAL CHILEAN MUTUAL FUNDS
(Cost $1,339,737)..................................... 1,359,047
-----------
TOTAL SHORT-TERM INVESTMENTS (Cost $1,848,297).........
1,866,460
-----------

TOTAL INVESTMENTS-88.07%
(Cost $202,764,552) (Notes A,D)....................... 186,576,938
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES-11.93%.................................... 25,281,808
-----------
NET ASSETS-100.00%..................................... $211,858,746
-----------
-----------
- ---------------------------------------------------------
* 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 May 31, 1998 the Fund committed to investing an
additional $750,000, $2,028,831 and $129,766 of
capital in Kardan Technology Ventures L.P., Emerging
Markets Ventures L.P. and Exxel Capital Partners,
respectively.
## 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 11/28/00, with a
market value of $6,571.
(c) As of March 31, 1998, this investment ceased accruing
interest.
ADR American Depositary Receipts.
ADS American Depositary Shares.
CLP Chilean Pesos.
GDR Global Depositary Receipts.
ON Ordinary Shares.
PN Preferred Shares.
PNA Preferred Shares, Class A.
PNB Preferred Shares, Class B.
USD United States Dollars.
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
12
<PAGE>
- --------------------------------------------------------------------------------

THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES - MAY 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost
$202,764,552) (Note A)................. $186,576,938
Cash (including $74,705 of foreign
currencies with a cost of $74,671)
(Note A)............................... 28,349,458
Collateral received for securities
loaned (Note A)........................ 1,283,400
Receivables:
Investments sold...................... 7,315,499
Dividends............................. 521,596
Interest.............................. 3,298
Prepaid expenses and other assets....... 34,011
------------
Total Assets............................ 224,084,200
------------

LIABILITIES
Payables:
Investments purchased................. 10,201,082
Payable upon return of securities
loaned (Note A)...................... 1,283,400
Investment advisory fee (Note B)...... 515,101
Administration fees (Note B).......... 45,048
Other accrued expenses................ 180,823
------------
Total Liabilities....................... 12,225,454
------------
NET ASSETS (applicable to 16,107,169
shares of common stock outstanding)
(Note C)............................... $211,858,746
------------
------------

NET ASSET VALUE PER SHARE ($211,858,746
DIVIDED BY 16,107,169)................ $13.15
------------
------------

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..... 673,667
Accumulated net realized gain on
investments and foreign currency
related transactions................... 3,618,706
Net unrealized depreciation in value of
investments and translation of other
assets and liabilities denominated in
foreign currencies..................... (16,200,975)
------------
Net assets applicable to shares
outstanding............................ $211,858,746
------------
------------
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
13
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
INVESTMENT INCOME
Income (Note A):
Dividends............................. $ 2,831,255
Interest.............................. 578,922
Less: Foreign taxes withheld.......... (252,866)
------------
Total Investment Income............... 3,157,311
------------
Expenses:
Investment advisory fees (Note B)..... 1,502,302
Custodian fees........................ 208,828
Administration fees (Note B).......... 192,834
Accounting fees....................... 82,950
Printing.............................. 66,420
Audit and legal fees.................. 36,153
Directors' fees....................... 24,197
Transfer agent fees................... 14,560
NYSE listing fees..................... 12,063
Insurance............................. 10,463
Amortization of organizational
costs................................ 4,983
Other................................. 7,662
Chilean repatriation taxes (Note A)... 90,119
Brazilian taxes (Note A).............. 77,107
------------
Total Expenses........................ 2,330,641
------------
Net Investment Income................. 826,670
------------

NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND FOREIGN CURRENCY
RELATED TRANSACTIONS
Net realized loss from:
Investments........................... (210,173)
Foreign currency related
transactions......................... (403,540)
Net change in unrealized appreciation in
value of investments and translation of
other assets and liabilities
denominated in foreign currencies...... (22,474,064)
------------
Net realized and unrealized loss on
investments and foreign currency
related transactions................... (23,087,777)
------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................ $(22,261,107)
------------
------------
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
14
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

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

<TABLE>
<CAPTION>
For the Six Months
Ended For the Fiscal Year
May 31, 1998 Ended
(unaudited) November 30, 1997
<S> <C> <C>
-------------------------------------------

INCREASE/(DECREASE) IN NET ASSETS
Operations:
Net investment income................. $ 826,670 $ 1,145,156
Net realized gain/(loss) on
investments and foreign currency
related transactions................. (613,713) 29,101,315
Net change in unrealized appreciation
in value of investments and
translation of other assets and
liabilities denominated in foreign
currencies........................... (22,474,064) (7,995,918)
------------------ -------------------
Net increase/(decrease) in net
assets resulting from operations... (22,261,107) 22,250,553
------------------ -------------------
Dividends and distributions to
shareholders:
Net investment income................. (483,215) (1,449,645)
Net realized gain on investments...... (1,932,860) --
------------------ -------------------
Total dividends and distributions to
shareholders....................... (2,416,075) (1,449,645)
------------------ -------------------
Total increase/(decrease)in net
assets............................. (24,677,182) 20,800,908
------------------ -------------------

NET ASSETS
Beginning of period..................... 236,535,928 215,735,020
------------------ -------------------
End of period (including undistributed
net investment income of $673,667 and
$330,212, respectively)................ $211,858,746 $236,535,928
------------------ -------------------
------------------ -------------------
</TABLE>

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

STATEMENT OF CASH FLOWS - FOR THE SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C>
INCREASE/(DECREASE) IN CASH FROM
Operating Activities:
Investment income received............ $ 2,840,441
Operating expenses paid............... (2,594,856)
-------------
Net increase in cash from operating
activities............................. $ 245,585
Investing Activities:
Purchases of long-term portfolio
investments.......................... (162,024,133)
Purchases of short-term portfolio
investments, net..................... 1,349,211
Proceeds from disposition of long-term
portfolio investments................ 166,174,921
-------------
Net increase in cash from investing
activities............................. 5,499,999
Financing Activities:
Cash dividends paid................... (2,416,075)
------------
Net increase in cash.................... 3,329,509
Cash at beginning of period............. 25,019,949
------------
Cash at end of period (Note A).......... $ 28,349,458
------------
------------

RECONCILIATION OF NET DECREASE IN NET
ASSETS RESULTING FROM OPERATIONS TO NET
INCREASE IN CASH FROM OPERATING
ACTIVITIES
Net decrease in net assets resulting
from operations........................ $(22,261,107)
Adjustments:
Increase in dividend and interest
receivable........................... (316,870)
Decrease in accrued expenses.......... (267,464)
Decrease in prepaid expenses.......... 3,249
Net realized and unrealized loss on
investments and foreign currency
related transactions................. 23,087,777
-------------
Total adjustments....................... 22,506,692
------------
NET INCREASE IN CASH FROM OPERATING
ACTIVITIES............................. $ 245,585
------------
------------
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
16
<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
Period
For the Six December 29,
Months For the Fiscal Years Ended November 30, 1993*
Ended through
May 31, 1998 --------------------------------------- November 30,
(unaudited) 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period....... $14.69 $13.39 $11.60 $14.17 $13.89**
------------- ----------- ----------- ----------- -------------
Net investment income/(loss)............... 0.05 0.07 0.12 0.07 (0.01)
Net realized and unrealized gain/(loss) on
investments and foreign currency related
transactions.............................. (1.44) 1.32 1.76 (2.59) 0.29
------------- ----------- ----------- ----------- -------------
Net increase/(decrease) in net assets
resulting from operations................. (1.39) 1.39 1.88 (2.52) 0.28
------------- ----------- ----------- ----------- -------------
Dividends and distributions to
shareholders:
Net investment income.................... (0.03) (0.09) (0.09) (0.03) --
Net realized gain on investments and
foreign currency related transactions... (0.12) -- -- (0.02) --
------------- ----------- ----------- ----------- -------------
Total dividends and distributions to
shareholders.............................. (0.15) (0.09) (0.09) (0.05) --
------------- ----------- ----------- ----------- -------------
Net asset value, end of period............. $13.15 $14.69 $13.39 $11.60 $14.17
------------- ----------- ----------- ----------- -------------
------------- ----------- ----------- ----------- -------------
Market value, end of period................ $10.125 $11.25 $10.75 $9.75 $11.88
------------- ----------- ----------- ----------- -------------
------------- ----------- ----------- ----------- -------------
Total investment return(a)................. (8.83)% 5.46% 11.11% (17.49)% (14.87)%
------------- ----------- ----------- ----------- -------------
------------- ----------- ----------- ----------- -------------

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted).... $211,859 $236,536 $215,735 $186,921 $228,171
Ratio of expenses to average net assets#... 2.02%(b) 2.02% 1.81% 1.83% 2.02%(b)
Ratio of net investment income/(loss) to
average net assets........................ 0.72%(b) 0.46% 0.90% 0.65% (0.13)%(b)
Portfolio turnover rate.................... 78.79% 108.68% 23.89% 13.73% 24.63%
Average commission rate per share(c)....... $0.0007 $0.0005 $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.
# Ratios shown are inclusive of Brazilian transaction and Chilean
repatriation taxes, if any. If such taxes had not been imposed, the
ratio of expenses to average net assets would have been 1.87% for the
six months ended May 31, 1998, 1.83% for the fiscal year ended
November 30, 1997 and 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 program. Total investment return does not
reflect brokerage commissions or initial underwriting discounts and
has not been annualized.
(b) Annualized.
(c) Computed by dividing the total amount of brokerage commissions paid by
the total shares of investment securities purchased and sold during
the respective periods for which commissions were charged, as required
by the SEC for fiscal years beginning on or after September 1, 1995.

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

THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------

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:

MANAGEMENT ESTIMATES: The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make certain
estimates and assumptions that may affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.

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 Board of Directors has established general guidelines for
calculating fair value of non-publicly traded securities. At May 31, 1998, the
Fund held 11.57% of its net assets in securities valued in good faith by the
Board of Directors with an aggregate cost of $17,274,699 and fair value of
$24,509,284. The net asset value per share of the Fund is calculated on each
business day, with the exception of those days on which the New York Stock
Exchange is closed.

At the time of the Fund's organization, the Board of Directors of the Fund
adopted the following non-fundamental policies: (i) up to 30% of the Fund's
total assets may be invested in private placements of equity securities where
the Fund's investment adviser anticipates that a liquid market will develop for
these securities within a period of two to five years from the date of
acquisition; and (ii) up to 10% of the Fund's total assets may be invested in
equity securities of emerging market corporate issuers that are not
infrastructure companies. As disclosed in the Fund's prospectus at that time,
these policies and percentage limitations are subject to modification by the
Board of Directors if, in the reasonable exercise of the Board's business
judgment, modification is determined to be necessary or appropriate to carry out
the Fund's investment objective of long-term capital appreciation.

At a meeting of the Board of Directors held on December 8, 1997, the Board of
Directors unanimously approved modifications to the foregoing policies to
increase the limit on non-infrastructure companies from 10% to 20% and to permit
within that 20% limit investments in private equity funds (whether in corporate
or partnership form) that invest primarily in emerging markets without regard to
whether a liquid market is expected to develop for such investment. Any such
investment would continue to count against the overall 30% limit on private
placements. The Board approved these changes on the basis that the long-term
value added approach of an emerging markets private equity strategy is well
suited to the long-term capital appreciation objective of the Fund. When
investing through another investment fund, the Fund will bear its proportionate
share of the expenses incurred by that fund, including management fees.

CASH: Deposits held at Brown Brothers Harriman & Co., the Fund's custodian, in a
variable rate account are classified as cash. At May 31, 1998, the interest rate
was

- --------------------------------------------------------------------------------
18
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
5.0625% 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.

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 invested capital. For the six
months ended May 31, 1998, the Fund incurred $90,119 of such expense.

Effective January 23, 1997, Brazil imposes a 0.20% CONTRIBUCAO SOBRE
MOVIMENTACAO FINANCIERA ("CPMF") tax that applies to most debit transactions
carried out by financial institutions. For the six months ended May 31, 1998,
the Fund incurred $77,107 of such expense. For the calendar year ending December
31, 1994, the Brazilian Congress imposed a 0.25% withholding tax on financial
transactions.

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 in value of investments and translation of
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.

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

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

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 May
31, 1998, was $1,238,837, for which the Fund has received cash as collateral of
$1,283,400. Such cash collateral was reinvested into an overnight repurchase
agreement with Bear, Stearns & Co. Inc., which is in turn collateralized by U.S.
Government agency securities with a value of $1,316,556. 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.

For the six months ended May 31, 1998, the Fund earned $13,787 in securities
lending income which is included under the caption INTEREST 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 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.

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.

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

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

The Fund may enter into repurchase agreements on U.S. Government securities with
primary government securities dealers recognized by the Federal Reserve Bank of
New York and member banks of the Federal Reserve System and on securities issued
by the governments of foreign countries, their instrumentalities and with
creditworthy parties in accordance with established procedures. Repurchase
agreements are contracts under which the buyer of a security simultaneously buys
and commits to resell the security to the seller at an agreed upon price and
date. Repurchase agreements are deposited with the Fund's custodian and,
pursuant to the terms of the repurchase agreement, the collateral must have an
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. If the value of the underlying securities fall
below the value of the repurchase price plus accrued interest, the Fund will
require the seller to deposit additional collateral by the next business day. If
the request for additional collateral is not met, or the seller defaults on its
repurchase obligation, the Fund maintains the right to sell the underlying
securities at market value and may claim any resulting loss against the seller;
collectibility of such claims may be limited. At May 31, 1998 the Fund had no
such agreements.

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 six months ended May 31, 1998, BEA
earned $1,502,302 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 six months
ended May 31, 1998, BEA earned $9,972 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 six months ended May 31, 1998, BSFM earned $138,674 for administrative
services.

BankBoston, N.A. Sao Paulo ("BB") 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. BB is paid for its services out of the custody fee payable to
Brown Brothers Harriman & Co., the Fund's accounting agent and custodian, a
quarterly fee based on an annual rate of 0.10% of 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 invested 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 May 31, 1998, BEA
owned 7,169 shares.

NOTE D. INVESTMENT IN SECURITIES

For U.S. federal income tax purposes, the cost of securities owned at May 31,
1998 was $203,344,097. Accordingly, the net unrealized depreciation of
investments (including investments denominated in foreign currencies) of
$16,767,159, was composed of gross appreciation of $19,579,455 for those
investments having an excess of value over cost and gross depreciation of
$36,346,614 for those investments having an excess of cost over value.

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

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

For the six months ended May 31, 1998, total purchases and sales of securities,
other than short-term investments, were $166,444,117 and $172,110,402,
respectively.

NOTE E. CREDIT AGREEMENT

The Fund, along with 18 other U.S. regulated investment companies for which BEA
serves as investment adviser, has a credit agreement with BankBoston, N.A. 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 19
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 for the six months ended May 31, 1998.

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 May 31, 1998, per share value of the securities and percentage
of net assets which the securities comprise.

<TABLE>
<CAPTION>
NUMBER FAIR VALUE VALUE PERCENTAGE
OF ACQUISITION AT MAY 31, PER OF
SECURITY SHARES DATES COST 1998 SHARE NET ASSETS
- --------------------------------------- -------- ---------------- ---------- -------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Superbowl Acquisition LDC.............. 96 10/10/94 $ 842,956 $ 1,241,472 $12,932 0.59
The Renaissance Fund LDC............... 160 03/30/94 1,649,571 1,229,906 7,687 0.58
</TABLE>

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

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22
<PAGE>
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)

On March 24, 1998, 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 two 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 10,476,211 2,989,895 2,641,063
James J. Cattano 10,477,142 2,988,964 2,641,063
</TABLE>

In addition to the directors elected at the meeting, Peter A. Gordon, George W.
Landau, Martin M. Torino, Richard W. Watt and William W. Priest, Jr. 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, 1998.

<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTES
------------ --------- ---------- ----------
<S> <C> <C> <C> <C>
12,291,094 79,870 1,095,142 2,641,063
</TABLE>

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23
<PAGE>
DESCRIPTION OF INVESTLINK* PROGRAM

The InvestLink Program is sponsored and administered by BankBoston, N.A., not by
The Emerging Markets Infrastructure Fund, Inc. (the "Fund"). BankBoston, N.A.
will act as program administrator (the "Program Administrator") of the
InvestLink Program (the "Program"). The purpose of the Program is to provide
interested investors with a simple and convenient way to invest funds and
reinvest dividends in shares of the Fund's common stock ("Shares") at prevailing
prices, with reduced brokerage commissions and fees.

An interested investor may join the Program at any time. Purchases of Shares
with funds from a participant's cash payment or automatic account deduction will
begin on the next day on which funds are invested. If a participant selects the
dividend reinvestment option, automatic investment of dividends generally will
begin with the next dividend payable after the Program Administrator receives
his enrollment form. Once in the Program, a person will remain a participant
until he terminates his participation or sells all Shares held in his Program
account, or his account is terminated by the Program Administrator. A
participant may change his investment options at any time by requesting a new
enrollment form and returning it to the Program Administrator.

A participant will be assessed certain charges in connection with his
participation in the Program. First-time investors will be subject to an initial
service charge which will be deducted from their initial cash deposit. All
optional cash deposit investments will be subject to a service charge. Sales
processed through the Program will have a service fee deducted from the net
proceeds, after brokerage commissions. In addition to the transaction charges
outlined above, participants will be assessed per share processing fees (which
include brokerage commissions.) Participants will not be charged any fee for
reinvesting dividends.

The number of Shares to be purchased for a participant depends on the amount of
his dividends, cash payments or bank account or payroll deductions, less
applicable fees and commissions, and the purchase price of the Shares. The
Program Administrator uses dividends and funds of participants to purchase
Shares of Company Common Stock in the open market. Such purchases will be made
by participating brokers as agent for the participants using normal cash
settlement practices. All Shares purchased through the Program will be allocated
to participants as of the settlement date, which is usually three business days
from the the purchase date. In all cases, transaction processing will occur
within 30 days of the receipt of funds, except where temporary curtailment or
suspension of purchases is necessary to comply with applicable provisions of the
Federal Securities laws or when unusual market conditions make prudent
investment impracticable. In the event the Program Administrator is unable to
purchase Shares within 30 days of the receipt of funds, such funds will be
returned to the participants.

The average price of all Shares purchased by the Program Administrator with all
funds received during the time period from two business days preceding any
investment date up to the second business day preceding the next investment date
shall be the price per share allocable to a participant in connection with the
Shares purchased for his account with his funds or dividends received by the
Program Administrator during such time period. The average price of all Shares
sold by the Program Administrator pursuant to sell orders received during such
time period shall be the price per share allocable to a participant in
connection with the Shares sold for his account pursuant to his sell orders
received by the Program Administrator during such time period.

BankBoston, N.A., as Program Administrator, administers the Program for
participants, keeps records, sends statements of account to participants and
performs other duties relating to the Program. Each participant in the Program
will receive a statement of his account following each purchase of Shares. The
statements will also show the amount of dividends credited to such

- --------------------------------------------------------------------------------
24
<PAGE>
DESCRIPTION OF INVESTLINK* PROGRAM (CONTINUED)
participant's account (if applicable), as well as the fees paid by the
participant. In addition, each participant will receive copies of the Fund's
annual and semi-annual reports to shareholders, proxy statements and, if
applicable, dividend income information for tax reporting purposes.

If the Fund is paying dividends on the Shares, a participant will receive
dividends through the Program for all Shares held on the dividend record date on
the basis of full and fractional Shares held in his account, and for all other
Shares of the Fund registered in his name. The Program Administrator will send
checks to the participants for the amounts of their dividends that are not
to be automatically reinvested at no cost to the participants.

Shares of the Fund purchased under the Program will be registered in the name of
the accounts of the respective participants. Unless requested, the Fund will not
issue to participants certificates for Shares of the Fund purchased under the
Program. The Program Administrator will hold the Shares in book-entry form until
a Program participant chooses to withdraw his Shares or terminate his
participation in the Program. The number of Shares purchased for a participant's
account under the Program will be shown on his statement of account. This
feature protects against loss, theft or destruction of stock certificates.

A participant may withdraw all or a portion of the Shares from his Program
account by notifying the Program Administrator. After receipt of a participant's
request, the Program Administrator will issue to such participant certificates
for the whole Shares of the Fund so withdrawn or, if requested by the
participant, sell the Shares for him and send him the proceeds, less applicable
brokerage commissions, fees, and transfer taxes, if any. If a participant
withdraws all full and fractional Shares in his Program account, his
participation in the Program will be terminated by the Program Administrator. In
no case will certificates for fractional Shares be issued. The Program
Administrator will convert any fractional Shares held by a participant at the
time of his withdrawal to cash.

Participation in any rights offering, dividend distribution or stock split will
be based upon both the Shares of the Fund registered in participants' names and
the Shares (including fractional Shares) credited to participants' Program
accounts. Any stock dividend or Shares resulting from stock splits with respect
to Shares of the Fund, both full and fractional, which participants hold in
their Program accounts and with respect to all Shares registered in their names
will be automatically credited to their accounts.

All Shares of the Fund (including any fractional share) credited to his account
under the Program will be voted as the participant directs. The participants
will be sent the proxy materials for the annual meetings of shareholders. When a
participant returns an executed proxy, all of such Shares will be voted as
indicated. A participant may also elect to vote his Shares in person at the
Shareholders' meeting.

A participant will receive tax information annually for his personal records and
to help him prepare his U.S. federal income tax return. The automatic
reinvestment of dividends does not relieve him of any income tax which may be
payable on dividends. For further information as to tax consequences of
participation in the Program, participants should consult with their own tax
advisors.

The Program Administrator in administering the Program will not be liable for
any act done in good faith or for any good faith omission to act. However, the
Program Administrator will be liable for loss or damage due to error caused by
its negligence, bad faith or willful misconduct. Shares held in custody by the
Program Administrator are not subject to protection under the Securities
Investors Protection Act of 1970.

- --------------------------------------------------------------------------------
25
<PAGE>
DESCRIPTION OF INVESTLINK* PROGRAM (CONTINUED)

The participant should recognize that neither the Fund nor the Program
Administrator can provide any assurance of a profit or protection against loss
on any Shares purchased under the Program. A participant's investment in Shares
held in his Program account is no different than his investment in directly held
Shares in this regard. The participant bears the risk of loss and the benefits
of gain from market price changes with respect to all of his Shares. Neither the
Fund nor the Program Administrator can guarantee that Shares purchased under the
Program will, at any particular time, be worth more or less than their purchase
price. Each participant must make an independent investment decision based on
his own judgment and research.

While the Program Administrator hopes to continue the Program indefinitely, the
Program Administrator reserves the right to suspend or terminate the Program at
any time. It also reserves the right to make modifications to the Program.
Participants will be notified of any such suspension, termination or
modification in accordance with the terms and conditions of the Program. The
Program Administrator also reserves the right to terminate any participant's
participation in the Program at any time. Any question of interpretation arising
under the Program will be determined in good faith by the Program Administrator
and any such good faith determination will be final.

Any interested investor may participate in the Program. To participate in the
Program, an investor who is not already a registered owner of the Shares must
make an initial investment of at least $250.00. All other cash payments or bank
account deductions must be at least $100.00, up to a maximum of $100,000.00
annually. An interested investor may join the Program by reading the Program
description, completing and signing the enrollment form and returning it to the
Program Administrator. The enrollment form and information relating to the
Program (including the terms and conditions) may be obtained by calling the
Program Administrator at one of the following telephone numbers: First Time
Investors--(800) 969-3365; Current Shareholders--(800) 730-6001. All
correspondence regarding the Program should be directed to: BankBoston, N.A.,
InvestLink Program, P.O. Box 1681, Boston, MA 02105-1681.

- ---------------------------------------------
*InvestLink-SM- is a service mark of Boston EquiServe Limited Partnership.

- --------------------------------------------------------------------------------
26
<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 June
30, 1998, BEA managed approximately $35.6 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>
CLOSED-END FUNDS 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, Inc. (ETF)
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 Global 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>

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<PAGE>
DIRECTORS AND CORPORATE OFFICERS

Dr. Enrique R. Arzac Director

James J. Cattano Director

Peter A. Gordon Director
George W. Landau Director

Martin M. Torino Director

William W. Priest, Jr. Chairman of the Board of Directors
Richard W. Watt Director, President and Chief
Investment Officer

Robert B. Hrabchak Investment Officer

Michael A. Pignataro Chief Financial Officer and
Secretary
Hal Liebes Senior Vice President
Rocco A. Del Guercio Vice President

Wendy S. Setnicka 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

BankBoston, N.A.
P.O. Box 1865
Mail Stop 45-02-62
Boston, MA 02105-1865

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, PA 19103

LEGAL COUNSEL

Willkie Farr & Gallagher
787 Seventh Avenue

New York, NY 10019-6099

This report, including the financial statements herein, is sent to the
shareholders of the Fund for their information. The financial
information included herein is taken from the records of the Fund
without examination by independent accountants who do not express an
opinion thereon. 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]

- --------------------------------------------------------------------------------
3918-SA-98