Malaysia has fallen two places, and is now ranked at 14 in a global ranking of economic competitiveness by the IMD World Competitiveness Centre.
The 2015 IMD World Competitiveness Yearbook ranking put Malaysia behind Hong Kong (2), Singapore (3), Taiwan (11) and ahead of South Korea (25), China (22), Japan (27), Thailand (30), the Philippines (41) and Indonesia (42).
Based on a statement released by IMD, Malaysia’s tumble was in line with other Asian countries.
“Countries such as Japan (21st to 27th), Thailand (29th to 30th) and Indonesia (37th to 42nd) had all dropped a few spots in their competiveness ranking due to the decline in most Asian countries’ domestic economies.
“The US remained at the top of the ranking as a result of its strong business efficiency and financial sector, its innovation drive and the effectiveness of its infrastructure,” said IMD.
“Hong Kong and Singapore moved up, overtaking Switzerland, which dropped to fourth place. Canada (5), Norway (7), Denmark (8), Sweden (9) and Germany (10) remained in the top 10. Luxembourg moved to the top [six] from 11th place in 2014,” it added.
Malaysia needs to strengthen its economy on its own by going into more value-added activities, and empowering productivity growth, as well as leveraging on regional development and connectivity for higher growth and competitiveness, said IMD.
“[It also needs to] intensify regulatory review initiatives to modernise the business environment, strengthen technological capabilities to enhance value creation and enhance people-based economy by focusing on human capital expertise,” it added.
In this global ranking, which ranks 61 economies, the IMD studied several aspects of each country as a place to conduct business.
The Malaysian economy in 2015 had declined in the overall performance, based on the IMD’s report. Foreign currency reserves, diversification and resilience of the economy, public finances, subsidies and exchange rate stability have all seen a decline in 2015.
However, the country recorded improvements in 2015, in terms of overall productivity, labour productivity, real gross domestic product growth, direct investment flows abroad and current account balance.
Nine countries out of the top 10 countries in the competitiveness ranking have a common factor which is business efficiency, which focuses on the extent to which the national environment encourages enterprises to perform in an innovative, profitable and responsible manner.
“Simply put, business efficiency requires greater productivity, and the competitiveness of countries is greatly linked to the ability of enterprises to remain profitable over time… increasing productivity remains a fundamental challenge for all countries,” said IMD director Professor Arturo Bris.
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