Malaysia fell five places in the list of the world’s most competitive economies, due to declining commodity prices, the robust US dollar and the weakening of balance sheets in the private and public sectors.
In the 2016 World Competitiveness Yearbook (WCY), the Southeast Asian country was ranked as the 19th most competitive economy, down from 14th spot last year.
Most indicators in the IMD’s study are in US dollars. That’s why the weakening of the Ringgit against the greenback resulted in a drop in competitiveness, said Datuk Mohd Razali Hussain, Director-General of Malaysia Productivity Corporation.
Nevertheless, the country is still one of the top 20 most competitive countries in the globe, and the authorities hope that it will make it in the top ten by 2020.
“We’re positive with the general awareness about productivity and innovation as well as the three reports that we’ve been tracking – WCY, World Economic Forum Global Competitiveness Report and the World Bank Doing Business,” he said.
On these aforementioned reports, the country has made progress, noted Razali.
Moreover, the corruption scandal plaguing 1Malaysia Development Bhd (1MDB) may have also played a part in eroding the nation’s competitiveness, but this only based on perception and there may be other factors at play.
“Whatever issues that transpired in 2015 affect the perception of the respondents. We should not just think of 1MDB being the prime factor for all these perceptions. Apart from 1MDB, the respondents also have the perception that the exchange rate does not support the competitiveness of enterprises,” he added.
The latest WCY is based on an analysis of more than 340 criteria involving infrastructure, business efficiency, government efficiency and economic performance. The results are published by the Institute for Management Development in Lausanne, Switzerland.
Image: Sourced from http://traveltamed.com
Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email email@example.com