Malaysia slips in world competitiveness ranking

KUALA LUMPUR: The 2017 edition of the Institute for Management Development’s World Competitiveness Yearbook (WCY) saw Malaysia drop to 24th position, its lowest ranking in five years. It was ranked 19th last year.
Despite this, Malaysia continues to be ahead of Austria (25th), Japan (26th) and Korea (29th) and is ranked the second most competitive economy within Asean behind Singapore, as well as among the 32 economies with gross domestic product per capita of less than US$20,000 (RM85,600).
The report ranks 63 countries across the globe based on four main factors – economic performance, business efficiency, government efficiency and infrastructure. Each of these factors is divided into five subfactors that highlight every facet of the areas analysed.
Malaysia’s ranking, however, slipped in all four factors, dipping to 13th in economic performance (2016: 11th), 25th in government efficiency (2016: 18th), 19th in business efficiency (2016:14th) and 32nd in infrastructure (down just a notch from 31st in 2016).
Start-up incorporation (18.5% in 2017, from 4.0% last year) was among the 15 criteria that saw a decline.
According to Malaysia Productivity Corp director-general Datuk Mohd Razali Hussain, this was due to the implementation of the Goods and Services Tax, which prolonged the time frame taken to incorporate a start-up.
Mohd Razali said the decline in business and government efficiency has much to do with perception, which is influenced by external and internal factors. He cited the performance of exports and imports as one example that influenced the perception of the business community.
Malaysia performed well in terms of mobile broadband subscribers, internet bandwith speed, youth unemployment and cost of living index.
He said the areas which require improvement in terms of competitiveness have been identified.
“We have established nine working cluster groups to look into the indicators that need improvement,” Mohd Razali said.
He said the initiatives are to be coordinated and monitored in line with the Malaysian Productivity Blueprint launched by the government on May 8.
The WCY according to him will be used to compare how Malaysia has fared against its counterparts as well as to emulate the best practices from other countries.
“We are already addressing this issue, so perhaps next year we could see us going back to what we were before in terms of ranking,” Mohd Razali said, alluding to the improvement in economic performance in the first quarter of this year.