Malaysia ranks 24th in Global Competitiveness Ranking

By Alifah Zainuddin

Malaysia fell further in this year’s global competitiveness ranking to 24th place, after dropping five spots last year to 19th from 14th in 2015.

Despite the slip, Malaysia remained within the top 25 most competitive economies among 63 nations including Hong Kong, Switzerland, Singapore, the US and Netherlands.

The latest World Competitive- ness Yearbook 2017 — compiled by International Institute for Management Development (IMD) World Competitiveness Centre — released yesterday saw the likes of Finland, China, Ireland, Israel and Belgium climbing up and moving ahead of Malaysia.

However, the country continued to rank above Austria (25th), Japan (26th) and the Republic of Korea (29th).

The slip in ranking was attributed to the challenging external environment in 2016 that had affected the competitiveness of smaller economies, the statement said. China’s economic slowdown and sharp movements in commodity prices had in turn created unfavourable sentiments toward Malaysia, contributing to the country’s decline in rank.

Among Asean economies and countries with gross domestic product (GDP) per capita income of less than US$20,000 (RM85,632), Malaysia was the second most competitive economy behind China.

On the economic performance segment, Malaysia performed strongly in petrol prices (4th), long-term unemployment (5th) and unemployment rate (6th), while weaknesses were found in exchange rates (48th) due to the ringgit’s volatility last year and GDP per capita (46th), said the statement.

For government efficiency, Malaysia’s strengths were in consumption tax rate (7th) and collected tax revenues (10th), largely attributed to the implementation of the Goods and Services Tax. Startup procedures remained weak as it sat in 53rd place but as a whole, the country’s tax policy ranked at 11th position.

Commenting on the performance, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the drop in ranking is a concern the government will look to address.

“Malaysia must continue to benchmark itself against the top per- forming economies such as Hong Kong, Switzerland and Singapore, and undertake necessary actions to improve competitiveness and productivity.

“The decline in ranking is something that we take seriously and we will establish a taskforce comprising of representatives from the public and private sectors to act upon the key areas for improvement,” Mustapa said.

He added that Putrajaya has taken necessary steps to improve the country’s performance as stipulated in the Malaysia Productivity Blueprint, namely in building high-skilled workforce for the future.

He said the government has also made efforts to drive digitalisation and innovation in companies across sectors, making industry accountable for productivity, forging a robust ecosystem and securing a strong implementation mechanism through effective governance.

The IMD World Competitiveness Centre also published a separate Digital Competitiveness Ranking for the first time this year.

The index measures countries’ ability to adopt and explore digital technologies leading to transformation in government practices, business models and society in general.

Malaysia also ranked 24th in this ranking with the top five spots occupied by Singapore, Sweden, the US, Finland and Denmark.

“The Digital Free Trade Zone (DFTZ), once completed, will position us among the leading countries in the global e-commerce market. We need to sustain this momentum and forge ahead,” Mustapa said, adding that all parties need to work harder to improve Malaysia’s position next year.