EMERGING MARKETS INFRASTRUCTURE FUND INC, N-30D, 1999-02-03

EMERGING MARKETS INFRASTRUCTURE FUND INC
N-30D, 1999-02-03

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<PAGE>

The Emerging Markets
Infrastructure Fund, Inc.
-------------------------
Annual Report
November 30, 1998

<PAGE>
CONTENTS

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

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

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

Statement of Assets and Liabilities................................... 14

Statement of Operations............................................... 15

Statement of Changes in Net Assets.................................... 16

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

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

Report of Independent Accountants..................................... 24

Results of Annual Meeting of Shareholders............................. 25

Tax Information....................................................... 25

Description of InvestLink-SM- Program................................. 26
</TABLE>

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

January 8, 1999

DEAR SHAREHOLDER:

I am writing to report on the activities of The Emerging Markets Infrastructure
Fund, Inc. (the "Fund") for the fiscal year ended November 30, 1998.

At November 30, 1998, the Fund's net asset value ("NAV") was $9.60 per share
(net of dividends and distributions paid of $0.46 per share), as compared to
$14.69 on November 30, 1997. Total net assets were $154,670,359 at November 30,
1998.

PERFORMANCE: HURT BY BRAZIL, ASIA, RUSSIA

For the fiscal year ended November 30, 1998, the Fund's total return, based on
NAV and assuming reinvestment of dividends and distributions, was -30.4%, versus
- -22.4% for the Morgan Stanley Capital International Emerging Markets Free Index
("EMF").

The Fund's underperformance of the EMF during this period was primarily due to
my approach to three regions:

- - Brazil. Country allocation and stock selection in Brazil were unfavorable.
Overweighting hurt performance due to the Brazilian market's poor returns
throughout 1998, particularly during the summer. One Brazilian stock proved
especially disappointing. This was Companhia de Saneamento Basico do Estado de
Sao Paulo ("Sabesp"), the water utility for the state of Sao Paulo and one of
the Fund's bigger holdings, which fell sharply for a variety of reasons, none
of them expected.

- - Asia. Since becoming Chief Investment Officer of the Fund in 1997, I have
chosen to have little exposure to Asian infrastructure stocks. This was
negative for performance in light of the recent major rally beginning in
September, which, I feel, had little fundamental basis. Infrastructure-related
stocks, furthermore, were not among the main beneficiaries of the Asian rally.
By contrast, banks and real estate shares have done very well.

- - Russia. Given the severe problems in Russia (which turned out to be the
world's worst-performing equity market in 1998), my decision to hold positions
in what proved to be weak telecom stocks was subtractive to returns.

A conspicuously positive contributor to performance was the extraordinary rise
of Global TeleSystems Group, Inc. ("GTS"). GTS is a young company that provides
a broad range of telecommunications services throughout Western and Central
Europe and does business in the former Soviet Union as well. The Fund initially
bought its shares in a private equity placement in 1994 at $7.15 per share.
Following GTS's initial public offering at $20 per share in February 1998, the
stock now trades at nearly $60. Investors (myself included) continue to regard
the company's prospects with great enthusiasm, and it remains one of the Fund's
largest single positions.

- --------------------------------------------------------------------------------
1
<PAGE>
LETTER TO SHAREHOLDERS

EMERGING MARKET EQUITIES: THE VOLATILITY IS NOT YET OVER

At some point in our lives, we have all seen signs of progress derailed:
highways that abruptly end, bridges laid bare and incomplete, passenger
terminals occupied only by pigeons and falling water. At some point in the
future, you know that the roads will be finished, the bridges will span their
gaps and the terminals will come alive with people en route to their
destinations. But not now.

Such is the case in many of the emerging world's equity markets. A period of
high investor optimism and virtually unrestrained growth in the early '90s began
to succumb in 1997 to a wave of political and macroeconomic problems in Asia. In
1998, the wave swept through Russia, Latin America and other emerging markets,
dealing them devastating--if not quite fatal--blows. Their economies contracted,
many of their stock markets collapsed and major building projects begun with
expectations of uninterrupted growth were curtailed or abandoned entirely.

While some have voiced the opinion that 1998's lows in emerging equities may
have cleared the way for a much-hoped-for recovery, there is ample evidence to
suggest that investors should be prepared for renewed volatility through at
least 1999:

- - One sign that the worst may not yet be over is the close correlation between
weak commodity prices and emerging equities' poor performance. This is not
surprising, in that many emerging economies are major producers of primary
products and derive significant foreign exchange inflows from their export.
With the benchmark CRB commodity-price index at a 21-year low and with few
signs of an upturn, investor enthusiasm for emerging market equities of any
flavor remains low and capital inflows into them are expected to fall sharply
in 1999.

- - Further undercutting emerging nations' economic prospects is significant
overcapacity in several key cyclical industries (E.G., cement, steel, oil,
petrochemicals). With corporate earnings weakening in the U.S., growth slowing
in Europe and domestic demand in emerging nations effectively halted, it is
unlikely that global growth will be strong enough to use up the excess
capacity. To date, in fact, exports from emerging markets have failed to grow
as anticipated. More likely, we will see commodity prices (and, thus, investor
confidence) continue to decline.

- - There also is the important question of how much further the U.S. is willing
or able to prop up the many ailing emerging nations that depend on its own
economic buoyancy. Although the U.S. stock market has proved resilient thus
far after expectations of earnings shortfalls were recently announced by a
growing number of major corporations, it cannot remain so much longer.
When--not if--the bubble bursts and U.S. stocks correct to some semblance of
normalcy, it likely will deal a telling blow to the emerging economies that
depend on it to keep their respective markets afloat.

I do not believe that all is gloom and doom, however. Current account surpluses
are growing in a number of developing countries. The recent multi-stage
reduction in U.S. interest rates by the Federal Reserve, along with new lending
programs by the International Monetary Fund, has helped to make much-needed
credit available to emerging nations (even if at a relatively high fiscal and
social cost).

- --------------------------------------------------------------------------------
2
<PAGE>
LETTER TO SHAREHOLDERS

These and other factors have resulted in powerful near-term rallies in several
emerging markets, including Asia, Latin America and, to some extent, Europe, the
Middle East and Africa. Longer-term, though, the sustainability of these rallies
is questionable.

PORTFOLIO STRUCTURE: HIGHLY DEFENSIVE

TOP 10 HOLDINGS, BY ISSUER *

<TABLE>
<CAPTION>
% OF
HOLDING COUNTRY NET ASSETS
------------------ --------- ---------------
<C> <S> <C> <C>
1. PEC Israel Israel
Economic 5.1
2. GTS Europe 5.0
3. Cemex Mexico 4.5
4. Telefonos de Mexico
Mexico 3.7
5. Elektrim E. Europe 3.0
6. Borsodchem Hungary 2.6
7. Camuzzi Argentina Argentina 2.5
8. Telesp Brazil 2.4
9. Titan Cement Greece 2.2
10. Cemig Brazil 2.2
</TABLE>

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

In short, there are dynamic and incredibly volatile forces in the global
macroeconomic environment that work both for and against any near-term recovery
by emerging equity markets. That the recovery will take place is certain. The
roads will be built. The bridges will span their gulfs. Passengers will reach
their destinations. The key question--as always--is, "When?" Its companion, of
course, is, "What to do about it in the meantime?"

My own plan is to continue to take a highly defensive stance in managing the
Fund. I have raised the Fund's cash position, for example, to 8.33% of assets.
In today's investment environment, marked by wild and unpredictable swings
during the course of a single day, I consider it most prudent to err on the side
of caution.

As for individual stocks, I am emphasizing well-managed companies with excellent
franchises, whose share prices have been undeservedly beaten down. Many of
these, accordingly, offer excellent potential for longer-term appreciation.

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
COUNTRY BREAKDOWN (% OF NET ASSETS)
<S> <C>
Other* 19.18%
Cash & Other Assets 12.92%
Hungary 5.26%
Argentina 7.35%
Brazil 9.57%
Chile 9.69%
Eastern Europe 4.09%
Europe 5.02%
India 6.16%
Israel 7.46%
Mexico 8.24%
Greece 5.06%
* Other includes Canada, China, Colombia, Egypt, Global, Hong
Kong,
Indonesia, Jamaica, Pakistan, Peru, Philippines, Russia,
Singapore,
South Korea, and United Kingdom and Venezuela
</TABLE>

- --------------------------------------------------------------------------------
3
<PAGE>
LETTER TO SHAREHOLDERS

CEMEX, S.A. DE C.V.

One such concern is Cemex, S.A. de C.V. ("Cemex"), a major Mexican cement maker
and exporter. The price of Cemex shares declined by over 50% (in peso terms)
during 1998, partially because its export volumes fell in response to
deteriorating macroeconomic conditions in many emerging markets. In particular,
the company has fallen victim to the disaster scenario of a possible Brazilian
currency devaluation, which would have an absolutely devastating effect on all
Latin American economies. Slowing growth in Mexico, the company's primary
market, has also hurt the share price.

Longer-term, however, the outlook for Cemex is quite favorable:

- - Cement is still the primary building product in Mexico, and the country's
strong demand for infrastructure and housing should ensure a steady and
significant increase in cement consumption through at least the early part of
the next millenium.

- - Very little additional domestic cement production capacity is expected to come
onstream within the next two years, furthermore, which should serve to support
the price of cement near its recent peak of $95 per ton.

- - Cemex's international operations have proven resilient, notably in Spain,
Venezuela and Mexico. In fact, the company remains one of the largest cement
traders in the world.

- - The expected completion of Cemex's 25% minority investment in PT Semen Gresik,
Indonesia's largest cement producer, should also be highly beneficial. While
the price paid by Cemex may seem questionable in light of Indonesia's current
problems, it makes sense in the long term, as Semen Gresik's operations will
enable Cemex to produce cement at well below its replacement cost. As the
Indonesian economy recovers, Cemex will prosper accordingly.

YPF SOCIEDAD ANONIMA

YPF Sociedad Anonima ("YPF") is Argentina's premier oil producer, refiner and
distributor, as well as the nation's largest company of any kind and one of its
most liquid stocks. It is another of my top choices among the universe of
emerging market infrastructure companies.

In a nutshell, I like YPF because management has demonstrated an exceptional
ability to deftly maneuver through a maze of domestic and international
challenges. It has done so while maximizing shareholder value and protecting
minority shareholders' rights, the latter a focus that is, at best, infrequently
applied in Latin America.

Another big positive for YPF is the fact that all of its revenues are
denominated in dollars and half of its costs are dollar-linked. Both of these
attributes would prove highly beneficial if the Argentine peso is devalued or,
as I expect, the dollar remains among the world's strongest currencies.

Of notable interest to investors at the moment is the Argentine government's
intention to auction off 14.9% of its total 20% stake in YPF shares in January
1999. As I write, considerable speculation surrounds the nature of the auction,
whose specific terms have not yet been announced. My sense is that existing YPF
shareholders should handsomely benefit from the auction, both because it will be
a major catalyst for the generation of shareholder value and it will eliminate a
meaningful source of market uncertainty.

- --------------------------------------------------------------------------------
4
<PAGE>
LETTER TO SHAREHOLDERS

OUTLOOK: MORE INVESTOR CONFIDENCE NEEDED

As I see it, the immediate prospects for emerging equity markets in general (and
infrastructure-related equities in particular) largely depend on the restoration
of investor confidence in the asset class. This task is daunting and will take
substantial efforts by the private and public sectors to get their respective
houses in order. Doing so will require major concessions on each part and a
continued willingness by the world's financial powers to support the transition
to a more consistent and predictable global economic environment.

The following are a few steps that, I believe, will help to make emerging
equities more attractive to a wider universe of investors:

- - Publicly traded companies in developing nations urgently need to improve
disclosure of their financial condition and strategic plans. This should serve
to increase transparency between companies operating in emerging markets and
their more developed counterparts. When investors can arrive at consistent
valuations and risk profiles, based on apples-to-apples comparisons, they will
be more willing to return to the emerging markets and provide them with the
growth capital they require.

- - Emerging industries must also be willing to accept at least some measure of
transnational supervision and exposure to the more proven management
techniques that large, successful international companies can bring to their
operations.

- - Finally, emerging enterprises must appreciate that investors need to be
adequately rewarded if they are to assume the risks associated with emerging
markets investing. Companies run as private fiefdoms and with managements
insufficiently motivated to enhance shareholder value will soon find
themselves out of the international capital loop, and, perhaps shortly
thereafter, even out of business.

As it likely will take years for these and other necessary changes to take
effect, the emerging markets should continue to exhibit higher-than-normal
volatility for some time. Nonetheless, I maintain my fundamental conviction that
selective investment in emerging equities will prove rewarding for the long-term
investor. Experience has shown that volatility often breeds opportunity for the
thoughtful and patient investor who is willing to look past, rather than merely
react to, day-to-day events. As always, I and my emerging markets colleagues at
BEA Associates remain focused on the former, with the singular goal of providing
our investors with the returns they should rightfully expect to receive.

I would like to close my remarks by noting an important development. This past
October, the Directors of the Fund proposed and approved a repurchase program to
buy back up to 15% of the Fund's outstanding common stock. The Directors
strongly believed in the appropriateness of such a move, given that the discount
of the Fund's share price to its net asset value had widened to compellingly
attractive levels. I will be able to discuss the progress made in this direction
in my next semi-annual report.

Respectfully,

[SIG]
Richard W. Watt
President and Chief Investment Officer *

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

FROM BEA ASSOCIATES:

I. We wish to remind shareholders whose shares are registered in their own name
that they automatically participate in the Fund's dividend reinvestment
program which is known as the InvestLink-SM- Program (the "Program"). The
Program 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 the Fund's Transfer Agent for details about participating in the
Program. The Program also provides for additional share purchases. The
Program is described on pages 26 through 28 of this report.

II.Many services provided to the Fund and its shareholders by BEA Associates
("BEA") and the Fund's service providers rely on the functioning of their
respective computer systems. Many computer systems cannot distinguish the
year 2000 from the year 1900, with resulting potential difficulty in
performing various calculations (the "Year 2000 Issue"). The Year 2000 Issue
could potentially have an adverse impact on the handling of security trades,
the payment of interest and dividends, pricing, account services and other
Fund operations.

BEA recognizes the importance of the Year 2000 Issue and is taking appropriate
steps necessary in preparation for the year 2000. At this time, there can be
no assurance that these steps will be sufficient to avoid any adverse impact
on the Fund nor can there by any assurance that the Year 2000 Issue will not
have an adverse effect on the Fund's investments or on global markets or
economies, generally.

BEA anticipates that its systems will be adapted in time for the year 2000.
BEA is seeking assurances that comparable steps are being taken by the Fund's
other major service providers. BEA will be monitoring the Year 2000 Issue in
an effort to ensure appropriate preparation.

- --------------------------------------------------------------------------------
* 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 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 fund focusing on smaller Latin American companies. 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.

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

THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

PORTFOLIO SUMMARY - AS OF NOVEMBER 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
SECTOR ALLOCATION

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
NOVEMBER 30, 1998 NOVEMBER 30, 1997
<S> <C> <C>
Cellular Communications 6.99% 6.16%
Chemicals 2.82% 0.00%
Electric Distribution 8.49% 15.70%
Electric Generation 3.83% 10.48%
Holding Companies 3.80% 1.34%
Infrastructure & Construction 10.74% 13.76%
Investment Companies 10.05% 5.40%
Local and/or Long Distance Telephone
Service 9.54% 7.65%
Office Retail 0.37% 0.00%
Oil & Gas 9.95% 13.05%
Steel 1.18% 4.39%
Telecommunications 9.70% 4.01%
Transportation 1.40% 0.33%
Other Infrastructure 6.31% 7.93%
Cash & Cash Equivalents 14.83% 9.80%
AS A PERCENT OF NET ASSETS
</TABLE>

GEOGRAPHIC ASSET BREAKDOWN

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
NOVEMBER 30, 1998 NOVEMBER 30, 1997
<S> <C> <C>
Africa 3.31% 1.68%
Asia 17.16% 10.82%
Carribean 0.72% 0.68%
Eastern Europe 9.43% 10.71%
Europe 11.03% 4.79%
Latin America 36.34% 50.96%
Middle East 7.64% 8.39%
North America 0.37% 0.00%
Global 1.08% 3.49%
Cash & Cash Equivalents 12.92% 8.48%
AS A PERCENT OF NET ASSETS
</TABLE>

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

PORTFOLIO SUMMARY - AS OF NOVEMBER 30, 1998 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
SUMMARY OF SECURITIES BY COUNTRY/REGION

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
NOVEMBER 30, 1998 NOVEMBER 30, 1997
<S> <C> <C>
Argentina 7.36% 3.77%
Brazil 9.57% 20.86%
Chile 9.69% 11.25%
Eastern Europe 4.16% 9.40%
Eqypt 3.31% 0.00%
Europe 5.02% 1.88%
Greece 5.06% 0.00%
Hong Kong 2.74% 4.63%
Hungary 5.26% 1.31%
India 6.16% 2.20%
Israel 7.46% 7.87%
Mexico 8.23% 9.71%
Peru 1.24% 2.19%
South Korea 3.42% 0.00%
Venezuela 0.00% 3.20%
Global 1.08% 3.49%
Other 7.32% 8.08%
AS A PERCENT OF NET ASSET
</TABLE>

TOP 10 HOLDINGS, BY ISSUER

<TABLE>
<CAPTION>
Percent of Net
Holding Sector Country/Region Assets
<C> <S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
1. PEC Israel Economic Corp. Investment Companies Israel 5.1
- ---------------------------------------------------------------------------------------------------------------------------------
2. Global TeleSystems Group, Inc. Cellular Communications Europe 5.0
- ---------------------------------------------------------------------------------------------------------------------------------
3. Cemex, S.A. de C.V. Other Infrastructure Mexico 4.5
- ---------------------------------------------------------------------------------------------------------------------------------
4. Telefonos de Mexico, S.A. de C.V. Local and/or Long Distance
Telephone Service Mexico 3.7
- ---------------------------------------------------------------------------------------------------------------------------------
5. Elektrim Spolka Akcyjna S.A. Infrastructure &
Construction Eastern Europe 3.0
- ---------------------------------------------------------------------------------------------------------------------------------
6. Borsodchem Chemicals Hungary 2.6
- ---------------------------------------------------------------------------------------------------------------------------------
7. Camuzzi Argentina S.A. Oil & Gas Argentina 2.5
- ---------------------------------------------------------------------------------------------------------------------------------
8. Telecomunicacoes de Sao Paulo S.A. Telecommunications Brazil 2.4
- ---------------------------------------------------------------------------------------------------------------------------------
9. Titan Cement Company S.A. Infrastructure &
Construction Greece 2.2
- ---------------------------------------------------------------------------------------------------------------------------------
10. Companhia Energetica de Minas Gerais Electric Distribution Brazil 2.2
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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

SCHEDULE OF INVESTMENTS - NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
<S> <C> <C>
- --------------------------------------------------------------------
EQUITY OR EQUITY-LINKED SECURITIES-84.97%
EQUITY OR EQUITY-LINKED SECURITIES OF INFRASTRUCTURE COMPANIES IN
EMERGING COUNTRIES-71.45%
ARGENTINA-7.35%
Camuzzi Argentina S.A.*+................ 1,729,347 $ 3,818,426
CEI Citicorp Holdings S.A., Class B..... 627,952 2,072,532
Exxel Capital Partners#=/=.............. 1,933,818 1,933,818
Transportadora de Gas del Sur S.A.
ADR.................................... 237,106 2,371,060
YPF Sociedad Anonima ADR##.............. 40,000 1,180,000
-----------
TOTAL ARGENTINA (Cost $10,477,854)..................... 11,375,836
-----------
BRAZIL-9.57%
Companhia de Saneamento Basico do Estado
de Sao Paulo ON........................ 30,416,113 3,343,265
Companhia Energetica de Minas Gerais
PN..................................... 132,175,484 3,345,936
Companhia Paranaense de Energia ADR..... 113,993 1,111,432
Companhia Paulista de Forca e Luz+...... 164,577 9,593
Companhia Paulista de Forca e Luz+...... 402 30
Petroleo Brasileiro S.A. PN............. 20,676,890 2,944,249
Telecomunicacoes de Sao Paulo S.A. ON... 1,834,214 202,376
Telecomunicacoes de Sao Paulo S.A. PN... 20,442,340 3,472,593
Trafo Equipamentos Electricos S.A. PN... 350,643 364,979
-----------
TOTAL BRAZIL (Cost $14,405,641)........................ 14,794,453
-----------
CHILE-7.78%
Besalco S.A............................. 404,205 863,778
Chilectra S.A.++........................ 151,884 850,382
Compania de Consumidores de Gas de
Santiago S.A........................... 138,945 415,692
Compania de Petroleos de Chile S.A...... 509,584 1,393,883

<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
CHILE (CONTINUED)
Compania de Telecomunicaciones de Chile
S.A. ADR............................... 81,900 $ 1,899,056
Compania de Telecomunicaciones de Chile
S.A., Class A.......................... 197,799 1,149,724
Compania Electrica del Rio Maipo S.A.... 1,990,540 978,361
Empresa Electrica Pehuenche S.A......... 1,032,141 496,275
Empresa Nacional de Electricidad S.A.... 3,260,878 1,156,760
Enersis S.A............................. 2,367,500 1,107,987
Puerto Ventanas S.A..................... 488,453 407,088
Sociedad Austral de Electricidad S.A.... 61,355 1,309,833
-----------
TOTAL CHILE (Cost $14,918,838)......................... 12,028,819
-----------
CHINA-0.75%
Beijing Datang Power Generation Company
Limited (Cost $1,253,390).............. 3,580,000 1,155,883
-----------
EASTERN EUROPE-4.09%
Elektrim Spolka Akcyjna S.A............. 556,855 4,684,761
SPT Telecom............................. 111,405 1,640,297
-----------
TOTAL EASTERN EUROPE (Cost $7,119,341).................
6,325,058
-----------
EGYPT-1.19%
Tourah Portland Cement Co. (Cost
$2,134,170)............................ 108,261 1,845,639
-----------
EUROPE-5.02%
Global TeleSystems Group, Inc. (Cost
$4,907,708)............................ 179,018 7,770,478
-----------
GREECE-5.06%
Hellas Telecommunication Organization
S.A.+.................................. 28,300 983,425
Hellenic Telecommunication Organization
ADR.................................... 24,900 301,912
</TABLE>

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

SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
GREECE (CONTINUED)
Hellenic Telecommunication Organization
S.A. GDR+,++........................... 190,412 $ 2,382,416
Panafon Hellenic Telecom S.A.+.......... 42,000 752,688
Titan Cement Company S.A................ 46,147 3,405,323
-----------
TOTAL GREECE (Cost $7,730,422)......................... 7,825,764
-----------
HONG KONG-2.32%
Asia Satellite Telecommunications
Holdings Ltd........................... 449,930 743,782
China Telecom (Hong Kong) Limited+...... 656,000 1,308,950
CLP Holdings Limited.................... 144,000 753,196
Hutchison Whampoa Limited............... 110,000 781,351
-----------
TOTAL HONG KONG (Cost $3,587,268)...................... 3,587,279
-----------
HUNGARY-2.69%
Magyar Tavkozlesi Rt. ADR##............. 98,855 2,699,977
MOL Magyar Olaj-es Gazipari Rt. GDR++... 63,100 1,454,455
-----------
TOTAL HUNGARY (Cost $4,014,649)........................ 4,154,432
-----------
INDIA-5.10%
Bharat Heavy Electricals Ltd............ 239,000 1,314,556
BSES Ltd.++............................. 57,300 694,763
Hindustan Corp.......................... 100,600 574,823
Mahanagar Telephone Nigam Ltd.++........ 132,500 1,401,188
Morgan Stanley India Investment Fund,
Inc.++................................. 29,800 3,185,739
Videsh Sanchar Nigam Ltd. GDR++......... 70,800 723,930
-----------
TOTAL INDIA (Cost $9,118,024).......................... 7,894,999
-----------
INDONESIA-0.39%
PT Indosat ADR (Cost $592,812).......... 42,600 596,400
-----------
ISRAEL-7.46%
Geotek Communications, Inc.+............ 49,501 2,178
<CAPTION>
No. of Value
Description Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
ISRAEL (CONTINUED)
Geotek Communications, Inc., Convertible
Preferred Series M, 8.50%*+............ 100 $ 0
Geotek Communications, Inc., Convertible
Preferred Series N*+(a)................ 1,584 0
K.T. Concord Venture Fund L.P.+#=/=..... 250,000 222,539
Nexus Telecommunication Systems Ltd.+... 210,283 657,134
PEC Israel Economic Corp.+.............. 330,951 7,963,508
Superbowl Acquisition LDC+=/=........... 96 1,245,984
Tadiran Telecommunications Ltd.......... 10,400 203,450
The Renaissance Fund LDC+=/=............ 160 1,245,028
-----------
TOTAL ISRAEL (Cost $13,334,914)........................ 11,539,821
-----------
JAMAICA-0.72%
Jamaican Assets I L.P.=/= (Cost
$1,165,363)............................ 1,156,324 1,119,946
-----------
MEXICO-3.70%
Telefonos de Mexico, S.A. de C.V. ADR##
(Cost $6,528,861)...................... 122,767 5,716,338
-----------
PAKISTAN-0.18%
Hub Power Co.+ (Cost $1,209,434)........ 957,600 278,171
-----------
PERU-1.19%
Ontario-Quinta A.V.V.*.................. 1,198,129 1,093,446
Telefonica del Peru S.A. ADR............ 50,000 740,625
-----------
TOTAL PERU (Cost $1,969,668)........................... 1,834,071
-----------
PHILIPPINES-1.27%
Manila Electric Company................. 131,000 418,934
Philippine Long Distance Telephone Co.
ADR.................................... 58,800 1,539,825
-----------
TOTAL PHILIPPINES (Cost $1,885,202).................... 1,958,759
-----------
</TABLE>

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

Par Value
Description (000) (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
EQUITY OR EQUITY-LINKED SECURITIES OF NON-INFRASTRUCTURE
COMPANIES-3.18%
CANADA-0.37%
Officeland Inc., Senior Unsecured
Convertible Notes, 12%, 12/31/25 (Cost
$571,429)*+............................ USD 571 $ 571,429
-----------
<CAPTION>
No. of Shares
-------------
<S> <C> <C>
EGYPT-0.24%
Paints & Chemicals Industries++ (Cost
$548,450).............................. 50,000 373,750
-----------
HUNGARY-2.57%
Borsodchem GDR+,++ (Cost $4,800,100).... 151,100 3,982,482
-----------
TOTAL NON-INFRASTRUCTURE COMPANIES (Cost $5,919,979)...
4,927,661
-----------
EQUITY SECURITIES OF INFRASTRUCTURE COMPANIES IN DEVELOPED
COUNTRIES-0.94%
UNITED KINGDOM-0.94%
Societe General Ladenburg Thalmann
Ukraine Fund Limited (Cost
$3,484,800)............................ 36,000 1,458,000
-----------
EQUITY SECURITES OF COMPANIES PROVIDING OTHER ESSENTIAL SERVICES IN
THE DEVELOPMENT OF AN EMERGING COUNTRY'S INFRASTRUCTURE-9.40%
BRAZIL-0.00%
Companhia Vale do Rio Doce PNA (Cost
$640).................................. 44 641
-----------
CHINA-0.45%
China Steel Corporation (Cost
$715,500).............................. 53,000 698,275
-----------
COLOMBIA-0.26%
Cementos Diamante S.A. ADS++............ 127,900 127,900
</TABLE>

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

SCHEDULE OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Description No. of Shares (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
COLOMBIA (CONTINUED)
Cementos Paz del Rio S.A. ADR+,++,##.... 35,535 $ 275,933
-----------
TOTAL COLOMBIA (Cost $1,597,254)....................... 403,833
-----------
EGYPT-1.88%
Nile Growth Company..................... 200,000 1,300,000
Suez Cement Company++................... 112,000 1,607,200
-----------
TOTAL EGYPT (Cost $4,680,000).......................... 2,907,200
-----------
HONG KONG-0.42%
Yanzhou Coal Mining Co. Ltd. (Cost
$719,354).............................. 3,254,000 651,388
-----------
INDIA-1.06%
India Special Situations Fund Ltd.*+
(Cost $2,000,000)...................... 2,000 1,634,380
-----------
MEXICO-4.54%
Cemex, S.A. de C.V. CPO................. 1,267,742 3,076,582
Cemex, S.A. de C.V., Class B............ 1,358,425 3,942,389
-----------
TOTAL MEXICO (Cost $7,771,902)......................... 7,018,971
-----------
PERU-0.06%
Ferreyros S.A. (Cost $94,329)........... 89,076 87,522
-----------
SOUTH KOREA-0.73%
Pohang Iron & Steel Company Ltd. ADR
(Cost $1,221,875)...................... 75,000 1,125,000
-----------
TOTAL OTHER ESSENTIAL SERVICES (Cost $18,800,854)......
14,527,210
-----------
TOTAL EQUITY OR EQUITY-LINKED SECURITIES (Cost
$144,615,033)......................................... 131,419,486
-----------
<CAPTION>

Par Value
Description (000) (Note A)
- --------------------------------------------------------------------
<S> <C> <C>
FIXED RATE INVESTMENT-0.20%
GLOBAL-0.20%
International Wireless Communications,
Inc. Senior Secured Notes,
14.00%-25.00%, 08/17/02*(b) (Cost
$503,404).............................. USD 385 $ 318,658
-----------
SHORT-TERM INVESTMENTS-1.91%
CHILEAN INFLATION-ADJUSTED TIME DEPOSITS-1.56%
<CAPTION>
Units
(000)
-------------
<S> <C> <C>
Banco Bice, 9.00%, 01/25/99**........... CLP 16 482,958
Banco Citibank, 9.40%, 01/18/99**....... 3 92,789
Banco Citibank, 9.20%, 01/19/99**....... 2 57,415
Banco Republic, 14.50%, 01/04/99**...... 15 446,545
Banco Santiago, 15.00%, 12/09/98**...... 8 228,657
Banco Santiago, 8.00%, 02/17/99**....... 18 547,067
Banco Security, 16.00%, 12/14/98**...... 2 51,288
Banco Security, 17.00%, 12/23/98**...... 3 81,205
Banco Security, 9.50%, 01/18/99**....... 14 427,396
-----------
TOTAL CHILEAN INFLATION-ADJUSTED TIME DEPOSITS (Cost
$2,432,985)........................................... 2,415,320
-----------
</TABLE>

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

TOTAL INVESTMENTS-87.08%
(Cost $148,072,435) (Notes A,D)....................... 134,688,454
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES-12.92%.................................... 19,981,905
-----------
NET ASSETS-100.00%..................................... $154,670,359
-----------
-----------
- ---------------------------------------------------------
* 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, not readily marketable (See Note
F).
# As of November 30, 1998, the Fund committed to
investing an additional $66,183, $750,000 and
$2,599,912 of capital in Exxel Capital Partners, K.T.
Concord Venture Fund L.P. and Emerging Markets
Ventures L.P., 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) As of March 31, 1998, this investment ceased accruing
interest.
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.
PNA Preferred Shares, Class A.
USD United States Dollars.
</TABLE>

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
13
<PAGE>
- --------------------------------------------------------------------------------

THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES - NOVEMBER 30, 1998
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost
$148,072,435) (Note A)................. $134,688,454
Cash (including $126,996 of foreign
currencies with a cost of $126,833)
(Note A)............................... 13,432,532
Collateral received for securities
loaned (Note A)........................ 3,488,263
Receivables:
Investments sold...................... 8,675,808
Dividends............................. 832,843
Interest.............................. 36,450
Prepaid expenses and other assets....... 6,351
------------
Total Assets............................ 161,160,701
------------

LIABILITIES
Payables:
Payable upon return of securities
loaned (Note A)...................... 3,488,263
Investments purchased................. 2,454,751
Investment advisory fee (Note B)...... 319,286
Administration fees (Note B).......... 38,805
Other accrued expenses................ 189,237
------------
Total Liabilities....................... 6,490,342
------------
NET ASSETS (applicable to 16,107,169
shares of common stock outstanding)
(Note C)............................... $154,670,359
------------
------------

NET ASSET VALUE PER SHARE ($154,670,359
DIVIDED BY 16,107,169)................ $9.60
------------
------------

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..... 367,211
Accumulated net realized loss on
investments and foreign currency
related transactions................... (56,073,138)
Net unrealized depreciation in value of
investments and translation of other
assets and liabilities denominated in
foreign currencies..................... (13,391,062)
------------
Net assets applicable to shares
outstanding............................ $154,670,359
------------
------------
</TABLE>

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

STATEMENT OF OPERATIONS - FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1998
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
INVESTMENT INCOME
Income (Note A):
Dividends............................. $ 4,710,569
Interest.............................. 1,267,118
Less: Foreign taxes withheld.......... (381,477)
------------
Total Investment Income............... 5,596,210
------------
Expenses:
Investment advisory fees (Note B)..... 2,615,834
Custodian fees........................ 371,291
Administration fees (Note B).......... 333,447
Accounting fees....................... 147,600
Audit and legal fees.................. 115,404
Printing.............................. 111,150
Directors' fees....................... 43,500
Transfer agent fees................... 25,200
NYSE listing fees..................... 24,192
Insurance............................. 20,984
Amortization of organizational
costs................................ 9,994
Other................................. 28,720
Brazilian taxes (Note A).............. 217,292
Chilean repatriation taxes (Note A)... 90,249
------------
Total Expenses........................ 4,154,857
------------
Net Investment Income................. 1,441,353
------------

NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND FOREIGN CURRENCY
RELATED TRANSACTIONS
Net realized loss from:
Investments........................... (55,444,643)
Foreign currency related
transactions......................... (788,831)
Net change in unrealized appreciation in
value of investments and translation of
other assets and liabilities
denominated in foreign currencies...... (19,664,151)
------------
Net realized and unrealized loss on
investments and foreign currency
related transactions................... (75,897,625)
------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................ $(74,456,272)
------------
------------
</TABLE>

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

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

<TABLE>
<CAPTION>
For the Fiscal Years Ended
November 30,
-----------------------------
1998 1997
<S> <C> <C>
-----------------------------

INCREASE/(DECREASE) IN NET ASSETS
Operations:
Net investment income................. $ 1,441,353 $ 1,145,156
Net realized gain/(loss) on
investments and foreign currency
related
transactions......................... (56,233,474) 29,101,315
Net change in unrealized appreciation
in value of investments
and translation of other assets and
liabilities denominated in foreign
currencies........................... (19,664,151) (7,995,918)
------------ ------------
Net increase/(decrease) in net
assets resulting from operations... (74,456,272) 22,250,553
------------ ------------
Dividends and distributions to
shareholders:
Net investment income................. (453,397) (1,449,645)
Net realized gain on investments and
foreign currency related
transactions......................... (6,955,900) --
------------ ------------
Total dividends and distributions to
shareholders....................... (7,409,297) (1,449,645)
------------ ------------
Total increase/(decrease) in net
assets............................. (81,865,569) 20,800,908
------------ ------------

NET ASSETS
Beginning of year....................... 236,535,928 215,735,020
------------ ------------
End of year (including undistributed net
investment income of $367,211 and
$330,212, respectively)................ $154,670,359 $236,535,928
------------ ------------
------------ ------------
</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 Fiscal Years Ended For the Period
November 30, December 29, 1993*
------------------------------------------ through
1998 1997 1996 1995 November 30, 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)............. 0.08 0.07 0.12 0.07 (0.01 )
Net realized and unrealized gain/(loss)
on investments and foreign currency
related transactions.................... (4.71) 1.32 1.76 (2.59) 0.29
--------- --------- --------- --------- ----------
Net increase/(decrease) in net assets
resulting from operations............... (4.63) 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.......................... (0.43) -- -- (0.02) --
--------- --------- --------- --------- ----------
Total dividends and distributions to
shareholders............................ (0.46) (0.09) (0.09) (0.05) --
--------- --------- --------- --------- ----------
Net asset value, end of period........... $9.60 $14.69 $13.39 $11.60 $14.17
--------- --------- --------- --------- ----------
--------- --------- --------- --------- ----------
Market value, end of period.............. $7.44 $11.25 $10.75 $9.75 $11.88
--------- --------- --------- --------- ----------
--------- --------- --------- --------- ----------
Total investment return(a)............... (30.41)% 5.46% 11.11% (17.49)% (14.87 )%
--------- --------- --------- --------- ----------
--------- --------- --------- --------- ----------

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000
omitted)................................ $154,670 $236,536 $215,735 $186,921 $228,171
Ratio of expenses to average net
assets#................................. 2.07% 2.02% 1.81% 1.83% 2.02 %(b)
Ratio of net investment income/(loss) to
average net assets...................... 0.72% 0.46% 0.90% 0.65% (0.13 )%(b)
Portfolio turnover rate.................. 169.85% 108.68% 23.89% 13.73% 24.63 %
</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 1.91% for the
fiscal year ended November 30, 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.

- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
17
<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:

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 November 30, 1998,
the Fund held 9.41% of its net assets in securities valued in good faith by the
Board of Directors with an aggregate cost of $18,463,398 and fair value of
$14,553,688. 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

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

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
classified as cash. At November 30, 1998, the interest rate was 4.375% 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, 1998, the Fund had a capital loss carryforward of $51,411,531
which expires in 2006.

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 fiscal
year ended November 30, 1998, the Fund incurred $90,249 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 fiscal year ended November 30,
1998, the Fund incurred $217,292 of such expense. Effective January 23, 1999,
the CPMF tax will expire and no longer be charged.

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 or losses 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

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

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

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, 1998, was $3,262,069, for which the Fund has received cash as
collateral of $3,488,263. 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 $3,622,383.
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 fiscal year ended November 30, 1998, the Fund earned $15,265 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.

At November 30, 1998, the Fund reclassified $950,957 of net realized losses from
foreign currency related transactions 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

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

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

The Fund may enter into repurchase agreements ("repos") 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
November 30, 1998, the Fund had no such agreements, other than the cash
collateral received that was reinvested in a repo under the Fund's securities
lending program.

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,
1998, BEA earned $2,615,834 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, 1998, BEA was reimbursed $19,986 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, 1998, BSFM earned $241,462 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 November 30, 1998, BEA
owned 7,169 shares.

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

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

NOTE D. INVESTMENT IN SECURITIES

For U.S. federal income tax purposes, the cost of securities owned at November
30, 1998 was $154,265,678. Accordingly, the net unrealized depreciation of
investments (including investments denominated in foreign currencies) of
$19,577,224, was composed of gross appreciation of $8,664,208 for those
investments having an excess of value over cost and gross depreciation of
$28,241,432 for those investments having an excess of cost over value.

For the fiscal year ended November 30, 1998, total purchases and sales of
securities, other than short-term investments, were $305,089,229 and
$311,256,228, respectively.

NOTE E. CREDIT AGREEMENT

The Fund, along with 10 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 $25,000,000 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 11
funds exceed $25,000,000. 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 fiscal year ended November 30,
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 November 30, 1998, per share value of the securities and
percentage of net assets which the securities comprise.

<TABLE>
<CAPTION>
NUMBER FAIR VALUE PERCENTAGE
OF ACQUISITION AT NOVEMBER 30, VALUE OF
SECURITY SHARES DATES COST 1998 PER SHARE NET ASSETS
- --------------------------------------- -------- ---------------- ---------- ------------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Emerging Markets Ventures, L.P......... 159,653 01/22/98 $ 159,653 $ 148,637 $ 0.93 0.10
Emerging Markets Ventures, L.P......... 3,525 03/05/98 3,658 3,282 0.93 0.00
Emerging Markets Ventures, L.P......... 586,127 05/05/98 586,127 545,685 0.93 0.35
Emerging Markets Ventures, L.P......... 361,637 07/07/98 361,637 336,685 0.93 0.22
Emerging Markets Ventures, L.P......... 42,334 08/17/98 42,334 39,413 0.93 0.03
Emerging Markets Ventures, L.P......... 296,812 10/27/98 296,812 276,332 0.93 0.18
Exxel Capital Partners................. 1,787,688 05/11/98 1,861,836 1,787,688 1.00 1.16
Exxel Capital Partners................. 111,520 07/07/98 113,293 111,520 1.00 0.07
Exxel Capital Partners................. 34,610 09/01/98 34,610 34,610 1.00 0.02
Jamaican Assets I L.P.................. 578,162 07/29/97 582,682 559,973 0.97 0.36
Jamaican Assets I L.P.................. 578,162 10/20/97 582,681 559,973 0.97 0.36
K.T. Concord Venture Fund L.P.......... 250,000 12/08/97 252,288 222,539 0.89 0.14
Superbowl Acquisition LDC.............. 96 10/10/94 960,866 1,245,984 12,979.00 0.81
The Renaissance Fund LDC............... 160 03/30/94 1,537,995 1,245,028 7,781.43 0.80
</TABLE>

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

- --------------------------------------------------------------------------------
22
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.

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

NOTE G. SHARE REPURCHASE PROGRAM

On October 21, 1998, the Fund announced that its Board of Directors has
authorized the repurchase by the Fund of up to 15% of the Fund's outstanding
common stock, for the purposes of enhancing shareholder value. The Fund's Board
has authorized management of the Fund to repurchase such shares in open market
transactions at prevailing market prices from time to time and in a manner
consistent with the Fund continuing to seek to achieve its investment
objectives. The Board's actions were taken in light of the significant discounts
at which the Fund's shares recently have been trading. It is intended both to
provide additional liquidity to those shareholders that elect to sell their
shares and to enhance the net asset value of the shares held by those
shareholders that maintain their investment. The repurchase program will be
subject to review by the Directors of the Fund. From October 21, 1998 to
November 30, 1998, the Fund did not repurchase any of its shares.

- --------------------------------------------------------------------------------
23
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

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

In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Emerging Markets Infrastructure
Fund, Inc. (the "Fund") at November 30, 1998, and the results of its operations
for the year then ended, changes in its net assets for each of the two years in
the period then ended, and its financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
November 30, 1998 by correspondence with the custodian, brokers and issuers,
provide a reasonable basis for the opinion expressed above.

PricewaterhouseCoopers LLP

2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 14, 1999

- --------------------------------------------------------------------------------
24
<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 PricewaterhouseCoopers LLP 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>

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, 1998) as to the U.S. federal tax status of distributions received
by the Fund's shareholders in respect of such fiscal year. Of the $0.46 per
share dividend paid in respect of such fiscal year, $0.03 was derived from net
investment income and $0.43 was derived from net long-term capital gains.

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 1998.

Because the Fund's fiscal year is not the calendar year, notification will be
sent in respect of calendar year 1998. The notification, which will reflect the
amount to be used by calendar year taxpayers on their 1998 federal income tax
returns, will be made in conjunction with Form 1099-DIV and will be mailed in
January 1999.

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.

- --------------------------------------------------------------------------------
25
<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 allo-
cated 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

- --------------------------------------------------------------------------------
26
<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.

- --------------------------------------------------------------------------------
27
<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 8040, Boston, MA 02266-8040.

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

- --------------------------------------------------------------------------------
28
<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
December 31, 1998, BEA managed approximately $35.3 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 listed below at 1-800-293-1232 or visit our website on the
Internet: http://www.beafunds.com.

<TABLE>
<S> <C>
CLOSED-END FUNDS
SINGLE COUNTRY
The Brazilian Equity Fund, Inc. (BZL)
The Chile Fund, Inc. (CH)
The First Israel Fund, Inc. (ISL)
The Indonesia Fund, Inc. (IF)
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)
FIXED INCOME
BEA Income Fund, Inc. (FBF)
BEA Strategic Global Income Fund, Inc. (FBI)
</TABLE>

Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that The Emerging Markets Infrastructure
Fund, Inc. may from time to time purchase shares of its capital stock in the
open market.

- --------------------------------------------------------------------------------
<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 President, Chief Investment Officer
and Director

Robert B. Hrabchak Investment Officer

Hal Liebes Senior Vice President

Michael A. Pignataro Chief Financial Officer and
Secretary

Rocco A. Del Guercio Vice President

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. 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-AR-98