Standing tall and strong… Malaysia is highest ranked among the developing Asian economies and ahead of developed economies such as Austria, Australia, France and South Korea.
The World Economic Forum (WEF) ranks Malaysia 20th among 144 economies in its latest Global Competitive Index (GCI). This is four rungs up from the previous GCI ranking of 24th out of 148 countries.
The nation remains the highest ranked among the developing Asian economies. It is also the second-most competitive economy among the 24 countries moving from an efficiency-driven stage of development to one that is driven by innovation.
It is interesting to note that Malaysia ranks ahead of developed economies such as Austria (21), Australia (22), France (23) and South Korea (26).
WEF in its just released Global Competitiveness Report 2014-2015 highlights Malaysia’s nine-spot advancement in the institutions pillar, which largely drove its progress this year. Malaysia ranks no lower than 60th in any of the 12 pillars of the GCI. In fact, the nation is one of only three countries that have recorded higher values in all areas since 2010, the others being the Philippines and the Russian Federation.
“It ranks an outstanding 4th in the financial market development pillar, which reflects its efforts to position itself as the leading centre of global Islamic finance. And it ranks 7th in the efficiency of its goods and services markets and a business-friendly institutional framework (29th),” it says.
WEF notes that in a region plagued by corruption and red tape, Malaysia stands out as one of the very few countries that have been relatively successful at tackling these two issues, as part of its Economic Transformation Programme (ETP) and Government Transformation Programme (GTP).
“Malaysia ranks a satisfactory 26th in the ethics and corruption component of the Index, but room for improvement remains. Furthermore, Malaysia ranks 11th for the quality of its transport infrastructure, a remarkable feat in this part of the world, where insufficient infrastructure and poor connectivity are major obstacles to development for many countries,” it says.
“Finally, Malaysia’s private sector is highly sophisticated (15th) and already innovative (21st). All this bodes well for a country that aims to become a high-income, knowledge-based economy by the end of the decade,” it adds.
Amid this largely positive assessment on Malaysia, WEF points out three of the nation’s major competitive challenges – the government budget deficit, which represented 4.6% of GDP in 2013 (102nd); the low level of female participation in the workforce (119th); and the still comparatively low technological readiness (60th).
Malaysia Productivity Corp (MPC) director-general, Datuk Mohd Razali Hussain (pic) told a press conference that the government would continue to intensify efforts in the pillars of macroeconomic environment, labour market efficiency and technological readiness.
“Macroeconomic environment recorded a drop of six places to 44th position from 38th last year. Our area of concern is the government budget balance and general government debt,” he shared.
On technological readiness, Mohd Razali said MPC would like to propose the establishment of a task force to improve technological readiness in the country. Among the initiatives that need to be intensified included mobile broadband subscriptions per 100 population, international Internet bandwidth and fixed broadband Internet subscriptions per 100 population.
Meanwhile, the general business environment of Malaysia continues to improve, remarks Chris Eng, Head of Research / Head of Products & Alternative Investments, Investment Management Division of Etiqa Insurance & Takaful.
“This is evident in the strong GDP growth in the first half of 2014, where Malaysia recorded the highest growth rate of 6.3% year-on-year versus its major ASEAN peers such as Singapore, Thailand, Indonesia and Philippines. This is a surprising development given that Malaysia has tended to be overshadowed by its less developed peers in terms of GDP growth since the mid 2000s,” says Eng.
“We continue to see business friendly policies from the Government although we note some less-than-positive developments with regards to freedom of speech. As for the increased cost of living faced by Malaysians, it is partly a by product of the booming economy where not all sectors will grow at the same pace. The strong growth exhibited this year has come from the export and oil & gas sectors and this will take time to flow through to the rest of the country,” he adds.