Malaysia slips in competitiveness ranking

Malaysia slips in competitiveness ranking

By Zurairi AR
May 30, 2013

File photo of a container yard at North Port in Port Klang. Malaysia’s economic competitiveness ranking, according to an international rankings group. — Reuters picKUALA LUMPUR, May 30 — Malaysia fell one slot from 14th to 15th in a closely-watched international ranking of economic competitiveness, continuing a three-year steady trend since its fall from 10th to 16th in 2011.

This comes as Putrajaya touted Malaysia’s rise from 16th to 14th in 2012’s ranking earlier this year, including during Prime Minister Datuk Seri Najib Razak’s presentation of the Economic Transformation Programme’s (ETP) report card just before Election 2013.

In the 25th anniversary World Competitive Rankings report released by the Institute of Management Development (IMD) today, the US topped the list followed by Switzerland and Hong Kong. All three countries were also in top three positions last year.

“The golden rules of competitiveness are simple: manufacture, diversify, export, invest in infrastructure, educate, support small-medium enterprises (SMEs), enforce fiscal discipline, and above all maintain social cohesion,” said Prof Stephane Garelli, director of the IMD World Competitiveness Center, in the report.
The Malaysia Productivity Corporation (MPC) outlined in the report several challenges that the country is facing this year, including reducing the budget deficit and achieving fiscal balance for economic sustainability.
Bank Negara Malaysia (BNM) governor Tan Sri Dr Zeti Akhtar Aziz had also expressed the same concern this month, urging the government to carry out its pre-election pledges within the budget.
“It is important to rationalise the budget deficit because the government has also made a commitment to do so over the next few years and to manage its level of indebtedness,” said Zeti after presenting Malaysia’s sluggish 4.1 per cent gross domestic product (GDP) growth in this year’s first quarter.

Barisan Nasional (BN) had promised election pledges of cheaper cars, fuel price cuts, building cheaper homes and more cash in the people’s pockets — which were estimated to cost around RM20 billion.

Meanwhile, Putrajaya is expecting to narrow Malaysia’s fiscal deficit to 4 per cent of GDP by this year, and 3 per cent by 2015.
In IMD’s ranking, Malaysia’s close neighbour Singapore also fell one slot from 4th to 5th, while the UAE leapfrogged other top 10 countries to rise from 16th place to 8th.

Other countries in the top 10 ranking included Sweden, Norway, Canada, Germany and Qatar. Taiwan, Denmark, Luxembourg and the Netherlands were the other countries which ranked above Malaysia.
When the ranking was started in 1989, it was split into two groups, and Malaysia together with Singapore and Hong Kong led the emerging markets list.

The two lists were merged in 1997, which saw Malaysia ranked 14th. Malaysia was ranked 18th in 2009 before rising to 10th place in 2010, its best ranking in the last five years.

Among its peers in the Asia-Pacific region, Malaysia was placed 4th in 2013, the same as last year.
In March this year, the 2012 ETP annual report highlighted recognition from global organisations, where Malaysia increased its ranking from 18 last year to 12 this year in the World Bank’s Doing Business Report, ahead of Sweden, Taiwan, Germany, Japan and Switzerland.

AT Kearney’s Foreign Direct Investment (FDI) confidence index also showed that Malaysia has improved from 21st place in 2010 to 10th in 2012.