It has benefited from strong demand in Asia and efficient policies
FOR the first time since Malaysia participated in the World Competitiveness Yearbook (WCY) study by the Swiss-based Institute for Management Development (IMD) since 1999, the country has been ranked one of the top 10 most competitive nations among 58 economies.
Malaysia achieved an index score of 87.228 compared with 77.162 in the previous year. This has propelled us to 10th place from 18th place last year. The country has benefited from strong demand in Asia and the implementation of efficient government policies.
The top 10 countries and their respective scores are shown in Table 1.
Malaysia has overtaken several developed countries such as Denmark, 13th (2009: 5th), the Netherlands, 12th (2009: 10th) and Luxembourg which was ranked 11th (2009: 12th).
Datuk Seri Mustapa Mohamed Malaysia continues to be ahead of Britain, ranked 22nd position (2009: 21st), South Korea 23rd position (2009: 27th) and Thailand 26th (2009: 26th).
Higher Confidence
The improvements have been largely due to the performance of both the statistical and perception data. This reflects the strong fundamentals in the Malaysian economy as well as a positive change in perception among respondents.
The rakyat’s higher confidence level is testimony that the people-friendly initiatives as depicted in the “One Malaysia, People First, Performance Now” have been successful.
Malaysia’s performance according to the four competitiveness factors showed that the country recorded remarkable improvement in rankings for government efficiency at 9th position (2009: 19th) and business efficiency at 4th (2009: 13th). The economic performance and the infrastructure factors improved to 8th (2009: 9th) and 25th (2009: 26th) respectively. (See Table 2)
Initiatives
Since the last quarter of 2009, the economy has been growing at a faster pace than expected. This was due to a combination of government spending, lower inflation rate and accommodative monetary policy that helped boost domestic demand.
Gross domestic product (GDP) expanded by 4.5% in the fourth quarter, higher than the expected 3.2%. The growth momentum continued into the first quarter this year with gross exports rising by 30.7%, contributing to GDP growth of 10.1%.
Malaysia’s export recorded a new high for the month of March this year. This registered a significant growth of 36.4% year-on-year. Given the robust performance and the government’s economic initiatives, Malaysia is expected to achieve its target of 6% growth this year.
Besides the surge in exports, there was a marked improvement in private spending. Automotive sales surged 25% year-on-year in March to 56,139 units up from 44,896 units in the same month last year. Recent high-value investments by foreign companies are indicative of investor confidence on Malaysia.
Coca-Cola is investing RM1bil in a bottling plant and Hong Kong-based Sun Bear Solar Ltd is spending RM5.2bil in a solar glass-manufacturing plant.
For the first time since Malaysia participated in the WCY, both the government efficiency and business efficiency factors achieved remarkable top 10 rankings. This indicates a clear link between public and private sector engagement, which has resulted in a change in the way both sectors regard and work with each other.
Since the establishment of Pemudah (Government’s Special Task Force to Facilitate Business) in February 2007, which was aimed at enhancing transparency and streamlining processes and procedures, tangible results have been evident.
This ease of doing business in Malaysia has impacted positively on the rankings for government efficiency and business efficiency input factors.
For instance, the number of start-up days in Malaysia, an indicator of the ease of doing business, has improved. Currently, the number of start-up days is three compared with 11 previously. The aim is to further improve this to one day.
Continuous Government reforms have also resulted in improvement in several national key areas:
Street crime has dropped by 32% in the first quarter of 2010.
The number of hardcore families listed in the eKasih system has reduced to 32,271 from 44,643.
The perception on bribing and corruption has improved in ranking to 26 from 31 last year.
Bureaucracy in business activity has improved to 4th place from 16th previously.
The New Key Economic Activities, as outlined in the New Economic Model, are expected to further accelerate Malaysia’s economic transformation.
Infrastructure was ranked 25th (2009: 26th). The investment on the country’s infrastructure is for the long term. Hence, this will only show results over time. In 2001, Malaysia’s infrastructure was ranked at 38th position. This has improved over the years to 25th in this latest study.
The report also indicated that the innovative capacity of firms in generating new products and processes is high, with a ranking of 12, despite this being a new criteria.
This is in line with our emphasis on innovation and creativity to achieve quantum-leap growth. The declaration of 2010 as the Innovation Year has been an impetus towards this end.
In addition, the National Broadband Initiative is expected to further narrow the digital divide between the rural and urban areas.
Forging Ahead
Although Malaysia is now among the top 10 nations, we need to strive to maintain this achievement. This is important if we are to achieve high-income status by 2020.
Malaysia has the following challenges:
To continuously improve government delivery system to facilitate business
To strengthen the economy through high quality investment
To groom small and medium-sized enterprises for global competition
To continue to intensify life-long learning and nurture talented workforce; and
To drive productivity and competitiveness through a creative and innovative mindset.
FOR the first time since Malaysia participated in the World Competitiveness Yearbook (WCY) study by the Swiss-based Institute for Management Development (IMD) since 1999, the country has been ranked one of the top 10 most competitive nations among 58 economies.
Malaysia achieved an index score of 87.228 compared with 77.162 in the previous year. This has propelled us to 10th place from 18th place last year. The country has benefited from strong demand in Asia and the implementation of efficient government policies.
The top 10 countries and their respective scores are shown in Table 1.
Malaysia has overtaken several developed countries such as Denmark, 13th (2009: 5th), the Netherlands, 12th (2009: 10th) and Luxembourg which was ranked 11th (2009: 12th).
Datuk Seri Mustapa MohamedHigher Confidence
The improvements have been largely due to the performance of both the statistical and perception data. This reflects the strong fundamentals in the Malaysian economy as well as a positive change in perception among respondents.
The rakyat’s higher confidence level is testimony that the people-friendly initiatives as depicted in the “One Malaysia, People First, Performance Now” have been successful.
Malaysia’s performance according to the four competitiveness factors showed that the country recorded remarkable improvement in rankings for government efficiency at 9th position (2009: 19th) and business efficiency at 4th (2009: 13th). The economic performance and the infrastructure factors improved to 8th (2009: 9th) and 25th (2009: 26th) respectively. (See Table 2)
Initiatives
Since the last quarter of 2009, the economy has been growing at a faster pace than expected. This was due to a combination of government spending, lower inflation rate and accommodative monetary policy that helped boost domestic demand.
Gross domestic product (GDP) expanded by 4.5% in the fourth quarter, higher than the expected 3.2%. The growth momentum continued into the first quarter this year with gross exports rising by 30.7%, contributing to GDP growth of 10.1%.
Malaysia’s export recorded a new high for the month of March this year. This registered a significant growth of 36.4% year-on-year. Given the robust performance and the government’s economic initiatives, Malaysia is expected to achieve its target of 6% growth this year.
Besides the surge in exports, there was a marked improvement in private spending. Automotive sales surged 25% year-on-year in March to 56,139 units up from 44,896 units in the same month last year. Recent high-value investments by foreign companies are indicative of investor confidence on Malaysia.
Coca-Cola is investing RM1bil in a bottling plant and Hong Kong-based Sun Bear Solar Ltd is spending RM5.2bil in a solar glass-manufacturing plant.
For the first time since Malaysia participated in the WCY, both the government efficiency and business efficiency factors achieved remarkable top 10 rankings. This indicates a clear link between public and private sector engagement, which has resulted in a change in the way both sectors regard and work with each other.
Since the establishment of Pemudah (Government’s Special Task Force to Facilitate Business) in February 2007, which was aimed at enhancing transparency and streamlining processes and procedures, tangible results have been evident.
This ease of doing business in Malaysia has impacted positively on the rankings for government efficiency and business efficiency input factors.
For instance, the number of start-up days in Malaysia, an indicator of the ease of doing business, has improved. Currently, the number of start-up days is three compared with 11 previously. The aim is to further improve this to one day.
Continuous Government reforms have also resulted in improvement in several national key areas:
The New Key Economic Activities, as outlined in the New Economic Model, are expected to further accelerate Malaysia’s economic transformation.
Infrastructure was ranked 25th (2009: 26th). The investment on the country’s infrastructure is for the long term. Hence, this will only show results over time. In 2001, Malaysia’s infrastructure was ranked at 38th position. This has improved over the years to 25th in this latest study.
The report also indicated that the innovative capacity of firms in generating new products and processes is high, with a ranking of 12, despite this being a new criteria.
This is in line with our emphasis on innovation and creativity to achieve quantum-leap growth. The declaration of 2010 as the Innovation Year has been an impetus towards this end.
In addition, the National Broadband Initiative is expected to further narrow the digital divide between the rural and urban areas.
Forging Ahead
Although Malaysia is now among the top 10 nations, we need to strive to maintain this achievement. This is important if we are to achieve high-income status by 2020.
Malaysia has the following challenges:
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