After occupying the 19th spot last year, Malaysia slipped five notches in the latest World Competitiveness Yearbook (WCY) by the Institute for Management Development to settle in the 24th position, reported The Sun Daily.
While it is the country’s lowest ranking in five years, Malaysia remained the second most competitive Asean country behind Singapore. It was also ranked among the 32 economies with GDP per capita of less than US$20,000 (RM85,600).
The report ranked 63 countries based on four main factors – government efficiency, business efficiency, economic performance and infrastructure, which were further divided into five subfactors that underscore every facet of the areas analysed.
Notably, Malaysia saw its ranking slip in all four factors – falling from 18th to 25th in government efficiency, 14th to 19th in business efficiency, 11th to 13th in economic performance and 31st to 32nd in infrastructure.
Out of the 15 criteria, start-up incorporation was among those that posted a decline at four percent in 2016 to 18.5 percent this year.
Datuk Mohd Razali Hussain, director-general of Malaysia Productivity Corp, attributed the decline to the introduction of the goods and services tax, which prolonged the period needed to incorporate a start-up.
According to him, the drop in government and business efficiency is connected to perception, which is influenced by internal and external factors. The performance of imports and exports, for instance, influenced the perception of the country’s business community.
He revealed that the government has identified the areas requiring improvement in terms of competitiveness.
“We have established nine working cluster groups to look into the indicators that need improvement.”
In fact, the WCY report will be used to compare how the country fared against its counterparts while emulating the other countries’ best practices.
“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,” said Mohd Razali, referring to the improvement in economic performance in Q1 2017.
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