National transformation programmes – Economic Transformation Programme (GTP) and Government Transformation Programme (GTP) – are bearing fruit and being recognised.
Malaysia is the 8th most efficient government globally, according to the Global Competitive Report 2014-2015.
The report, published by the World Economic Forum (WEF) on its website, puts Malaysia ahead of Switzerland (9th) and Luxembourg (10th). Qatar emerges top, which surprised many, followed by Singapore and Finland. Even Rwanda made it to the list, raising many eyebrows. According to WEF, “Rwanda’s strong showing in 7th position was secured thanks in large part to the low level of waste in government spending.”
This list differs starkly with World Bank’s list of Top 20 countries with the best government. The latter was dominated entirely by the developed nations. Singapore, also at 2nd after Finland, is the only Asian country in the World Bank’s list.
Only four countries are in the Top 10 of both lists – Finland, Singapore, Switzerland and New Zealand.
This begs the question: Why such a divergence?
It all boils down to what were being measured. The lists were derived from two very different sets of values. Also, World Bank’s evaluation spans over a much longer period.
World Bank’s ranking was based on The Worldwide Governance Indicators (WGI) project, which reports aggregate and individual governance indicators for 215 economies over the period 1996-2013 on six dimensions of governance:- Voice and Accountability; Political Stability and Absence of Violence; Government Effectiveness; Regulatory Quality; Rule of Law; and Control of Corruption.
The scope is indeed very broad. The WGI report quotes: “Governance consists of the traditions and institutions by which authority in a country is exercised. This includes the process by which governments are selected, monitored and replaced; the capacity of the government to effectively formulate and implement sound policies; and the respect of citizens and the state for the institutions that govern economic and social interactions among them.”
The WEF list, meanwhile, was crafted from its Global Competitiveness Index (CGI) 2014-2015 which evaluates the efficiency and competitiveness landscape of 144 of the world’s countries/governments.
WEF did not indicate the exact values used to craft its Top 10 Most Efficient Governments list except that they include “the Wastefulness of Government Spending, Burden of Regulation, and Transparency of Policy-making, to produce an overall global ranking.” A total of 119 variables were measured in The CGI under 12 pillars of competitiveness to provide a comprehensive picture of the competitiveness landscape in countries around the world at different stages of economic development.
WEF also did not provide a complete ranking of the 144 governments, just the 10 most efficient and the 10 least efficient.
“Venezuela has the least efficient government, some way behind Italy and Argentina in second and third places,” WEF said.
To recap, Malaysia had an impressive showing in CGI 2014-2015 published last year.
Continuing its upward trend, Malaysia had made its way into the top 20 for the first time since the current GCI methodology was introduced in 2006. It remained the highest ranked among the developing Asian economies, the report highlighted.
Economic and Government Transformation Programmes bring success
Malaysia advanced nine positions in the institutions pillar, which largely drove the year’s progress. It ranked no lower than 60th in any of the 12 pillars of the GCI. In the financial market development pillar, it ranked an outstanding 4th, which reflects its efforts to position itself as the leading centre of global Islamic finance. And it ranked 7th in the efficiency of its goods and services markets and 29th for a business-friendly institutional framework.
Indeed, Malaysia’s national transformation programmes – Economic Transformation Programme (GTP) and Government Transformation Programme (GTP) – are bearing fruit and being recognised.
“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 and government transformation programmes,” WEF highlighted.
“The country, for instance, ranks an impressive 4th for the burden of government regulation, although its score differential with the leader in this area, Singapore, remains large. 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 said.
The report also noted that Malaysia’s private sector was 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.”
Amid this largely positive assessment, the report said “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) stand out as some of Malaysia’s major competitive challenges.”
Note that only three emerging economies have recorded higher values in all areas since 2010: Malaysia, the Philippines, and the Russian Federation.