Malaysia Remains Among the Top 15 Most Competitive Economies

The IMD World Competitiveness Yearbook 2013 released by the Institute for Management Development (IMD), Lausanne, Switzerland ranked Malaysia 15th out of 60 economies compared to 14th position out of 59 countries last year. Malaysia together with 13 other countries such as USA, Switzerland, Hong Kong, Sweden and Singapore maintained their top 15 positions. UAE has joined the top 15 with a rank of 8th position from 16th .

At 15th position, Malaysia continues to be ahead of Australia (16th ), United Kingdom (18th ), China (21st ), Korea (22nd ), and Japan (24th ). Malaysia's performance in the various categories of the report are as follows:

• In the category of countries with GDP per capita less than US$ 20,000, Malaysia improved to 1st position from 2nd position among 30 countries;
• Malaysia is placed 2nd in the ASEAN region after Singapore;
• In the Asia-Pacific region, Malaysia maintained its 4 th position out of 13 countries; and
• Among 29 countries with population greater than 20 million, Malaysia remained at 5th position.

The WCY assessed countries based on four competitiveness factors: Economic Performance, Government Efficiency, Business Efficiency and Infrastructure. It is indeed encouraging that Malaysia had improved in three of these factors; Economic Performance, Business Efficiency and Infrastructure. Top ten positions were achieved in Business Efficiency ranked 4th and Economic Performance 7th while Infrastructure also improved to 25th position.

Despite the weak external environment, the Malaysian economy performed better than expected, delivering faster and higher quality growth. Malaysia recorded a strong growth of 5.6 per cent in 2012, underpinned by consumption and investment spending. Consumer confidence picked up amidst positive income growth, improvement in employment, low inflation environment and a supportive government. Investor confidence in Malaysia continues to be strong, with foreign direct investments increasing to RM 18.3 billion in the first quarter of this year.

The Government had implemented many initiatives to enhance the competitiveness of the country such as the Government Transformation Programme (GTP) and Economic Transformation Programme (ETP) as well as procedural reforms to improve regulatory framework. These initiatives will be further intensified to ensure that the objective of a high income economy is achieved.

For the Government Efficiency factor of the WCY 2013, despite a decline of two positions, Malaysia is well placed among the top 15 countries, registering improvements in Fiscal Policy and Public Finance. Boosted by a strong domestic economy, Malaysia's economic fundamentals remain strong and the government has succeeded in lowering budget deficit to 4.5% of the Gross Domestic Product (GDP) in 2012 from 6.7% in 2009.

The Government noted Malaysia's Societal and Institutional Framework as reported in WCY 2013 specifically in the areas of political instability, ageing of society as well as safety and security of personal property. The Government is committed to build a resilient, dynamic and innovative economy; enhancing security and public safety; strengthening women's participation; fighting corruption as well as revitalising the public service and enhancing good governance.

To ensure that competitiveness is further enhanced, Malaysia will strive to achieve fiscal balance for economic sustainability through further reducing budget deficit; intensify regulatory review initiatives to modernise the business environment; leverage flexible skills and talent development for higher productivity and to meet market needs; enhance environmentally sustainable development for better quality of life and strengthen the innovation eco-system as well as intensifying commercialisation of R&D and technological capabilities.

Source: Minister of International Trade and Industry