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Dato’ Seri Mustapa Mohamed, Minister of International Trade and Industry says Malaysia’s strong resilience indicates that the right policies are in place. Malaysia’s commendable performance (ranked 12th out of 60 competitive countries) in the recently released World Competitiveness Yearbook (WCY) 2014, published by the World Competitiveness Centre (WCC) of the Institute for Management Development (IMD) in Lausanne, Switzerland is a recognition of Malaysia’s success in managing its economy and finances.
Malaysia Is Now 12th Most Competitive Economy : “WCY 2014 Ranking Sign That Plan On Track”
Malaysia has climbed another 3 ranks from 15th to 12th in world rankings of 60 most competitive economies (IMD WCY2014). The global perception on Malaysia reaffirms that the country is on track to become a developed nation by 2020. It is commendable that Malaysia performed better than some developed countries. Malaysia continues to be ahead of Taiwan (13th); United Kingdom (16th); Australia (17th); Japan (21st); China Mainland (23rd); and Korea (26th). Malaysia maintained 1st position in the category of countries with GDP per capita less than US$20,000 and achieved 4th position in the category of countries with population greater than 20 million. In the Asia Pacific region, Malaysia is ranked 3rd, while in the ASEAN region, Malaysia is ranked 2nd. Dato’ Seri Mustapa Mohamed said that the WCY 2014 ranking is a recognition of Malaysia’s success in implementing its government and transformation programmes and is a sign that our plan is on track.
MALAYSIA’S PERFORMANCE BYCATEGORIES
GDP Per Capita Less Than USD20,000
Population Greater Than 20 Million
Asia-Pacific Region
ASEAN Region
1st
4th
3rd
2nd
1st
5th
4th
2nd
20132014
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IMPROVING BUSINESS COMPETITIVENESS THE BIG DEAL: Better rankings show that reforms instituted by Malaysia are
reaping results
In the past three years, Malaysia has been chalking up encouraging results in global competitiveness rankings. On June 2, AT Kearney’s Washington DC office with the White House jointly released findings of the FDI Confidence Index 2014, pointing out Malaysia’s jump to the 15th position from the previous 25th. Signifying a leap in investor confidence within a 12-month period, the Index demonstrates investors’ confidence in Malaysia’s capacity to build competitiveness and move up the value chain into high technology and skill-intensive segments.
In the recently announced IMD World Competitiveness Yearbook 2014, Malaysia climbed three notches to 12th position. Effectively, we are in the top 20 percentile in the world to provide a competitive business environment for private sector to thrive. Earlier, the World Bank places us 6th in its Doing Business Report 2014, rendering Malaysia one of the top destination in the world offering ease of doing business. We have ably overtaken developed economies such as Norway, Australia and the United Kingdom.
Why are these global achievements so important for a country and why do we relentlessly pursue the move up the ranking ladder?
Essentially, these are indicators that reforms instituted in Malaysia are reaping the right results. It signifies the international community’s recognition of the strength of our economic fundamentals, the commitment of the government to pursue structural reforms and its assurance of our political stability. Rankings one-upmanship puts us in good stead to compete with regional counterparts. Singapore, Indonesia and Taiwan are but some examples of markets nipping at our heels in the global race for long-term, credible investments and global partnerships that build competitive strengths.
Top companies are increasingly attracted to our shores and this fits well with our drive to become a regional hub in strategic areas. Large-scale, innovative multinationals go a long way to create high-value, high-paying jobs for Malaysians, as well as allow for local companies to leverage on the exchange of knowledge. The proof of the pudding is in the eating.
Approved pipeline investments has been on the rise year on year. In 2011, approved investments was at RM154.6 billion; in 2012, RM167.8 billion and last year, RM216.5 billion. Since 2010, these results have surpassed the government’s annual investment target of RM148 billion under the 10th Malaysia Plan. Whilst pipeline investment offers us an insight into what is in store for the economy, the true test of investment lies in realised numbers. In the past few years, realized investments have also been rising year on year. In 2010, total investment hit RM179.8 billion (55% private investment); in 2011, RM197.2 billion (57% private investment); in 2012, RM241.7 billion (58% private investment) and last year, RM264.6 billion (61% private investment).
Why are we so strongly encouraged by these achievements and why must we keep pursuing the global competitiveness agenda?
In 2010, the government said we wanted to transform Malaysia to become a High-income economy by 2020. Our true north target is to achieve gross national income per capita of US$15,000 by attracting US$444 billion in investments and creating 3.3 million jobs. Under the Economic Transformation Programme, the government has implemented transformative actions to become more efficient in how we relate to and deal with the private sector. Difficult processes have been simplified. Unnecessary licenses and road blocks removed.
Efforts across ministries and agencies to deliberately improve investing conditions in Malaysia have hit all the right markers. PEMUDAH, for example, was established in 2007 to address specific areas to improve the ease of doing business in Malaysia as identified by the World Bank and they had done well. Even as we take pride as a nation in international recognition, we should not for a moment be complacent. In our drive towards high income, the rankings indicate we are on the right track in building a competitive business environment, and provide encouragement to keep at it.
By subjecting ourselves to the rigours and scrutiny of global organisations, our eyes are on the ball to continuously fine-tune structural integrity in pursuit of a sustainable and inclusive economic agenda.
Dato’ Seri Mustapa Mohamed, Minister of International Trade and Industry (MITI).
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GOING FOR TOP TEN IN 2020 “Malaysia was ranked 12th out of 60 economies compared to 15th position last year in the IMD World Competitiveness Yearbook (WCY) 2014. This performance had surpassed the target set for Malaysia. The WCY assesses countries based on four competitiveness factors and twenty sub-factors. The four factors are Economic Performance, Government Efficiency, Business Efficiency and Infrastructure. In the four factors assessed, Malaysia achieved top ten positions in two factors; Business Efficiency, ranked 5th and Economic Performance, ranked 9th; while Government Efficiency and Infrastructure ranked 15th and 25th respectively. Measures that have been undertaken under the Transformation Programmes and by PEMUDAH, had ensured that policies are in place to strengthen global competitiveness. With this achievement, the Malaysia Productivity Corporation (MPC) is optimistic that Malaysia will be able to achieve top ten position by 2020,” says Dato’ Mohd. Razali Hussein, Director General, Malaysia Productivity Corporation, during the media release of “Malaysia in the IMD World Competitiveness Yearbook”, 22nd May 2014.
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MALAYSIA AMONG WORLD’S MOST COMPETITIVE
The top ten most competitive nations are USA, Switzerland, Singapore, Hong Kong, Sweden, Germany, Canada, UAE, Denmark and Norway. Seven out of the ten countries are also in the top 10 for having an image abroad that encourages business development, according to an exclusive IMD survey of executives based in each of these countries. In general, there is a strong correlation between a country’s overall competitiveness ranking and its international image to do business. At 12th position, Malaysia is well placed amongst the most developed and competitive economies in the World and regionally in the Asia Pacific and ASEAN regions.
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EVOLUTION OF MALAYSIA’S COMPETITIVENESS Malaysia had been recording marked progress in the last few years, consistently being ranked among the top quartile of the World’s most competitive countries. However, the government is not complacent and is committed to further strengthen Malaysia’s public finances, ensure fiscal sustainability and promote long-term macroeconomic stability in the country. The setting up of Fiscal by the Prime Minister reflects Malaysia’s commitment to reduce fiscal deficit to 3% of GDP by 2015 and work towards a balanced budget by 2020.
To further ensure that Malaysia’s aspiration to be among the top 10 most competitive countries, Malaysia needs to further enhance growth enablers for sustainable economic development; harness talent to achieve higher productivity growth; intensify efforts to reduce unnecessary regulatory burdens and restrictions; curb higher inflation as a result of subsidy rationalisation; and strengthen technological capabilities to enhance value creation.
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IMD RELEASES ITS 2014 WORLD RANKINGS
The US leads, Europe recovers, and big emerging markets struggle
A country’s image abroad can also influence future competitiveness
Lausanne, Switzerland (May 22, 2014) : IMD, a top-ranked global business school based in Switzerland, today announced its annual world competitiveness ranking. As part of its ranking of 60 economies for 2014, the IMD World Competitiveness Center also looks at perceptions of each country as a place to do business.
“The overall competitiveness story for 2014 is one of continued success in the US, partial recovery in Europe, and struggles for some large emerging markets,” said Professor Arturo Bris, Director of the IMD World Competitiveness Center. “There is no single recipe for a country to climb the competitiveness ranking, and much depends on the local context.”
Highlights of the 2014 ranking
The US retains the No. 1 spot in 2014, reflecting the resilience of its economy, better employment numbers, and its dominance in technology and infrastructure. There are no big changes among the top ten. Small economies such as Switzerland (2), Singapore (3) and Hong Kong (4) continue to prosper, thanks to exports, business efficiency and innovation.
Europe fares better than last year, thanks to its gradual economic recovery. Denmark (9) enters the top ten, joining Switzerland (2), Sweden (5), Germany (6) and Norway (10).
Among Europe’s peripheral economies, Ireland (15), Spain (39) and Portugal (43) all rise, while Italy (46) and Greece (57) fall. Japan (21) continues to climb in the rankings, helped by a weaker currency that has improved its competitiveness abroad.
Else. where in Asia, both Malaysia (12) and Indonesia (37) make gains, while Thailand (29) falls amid political uncertainty. Most big emerging markets slide in the rankings as economic growth and foreign investment slow and infrastructure remains inadequate. China (23) falls, partly owing to concerns about its business environment, while India (44) and Brazil (54) suffer from inefficient labour markets and ineffective business management. Turkey (40), Mexico (41), the Philippines (42) and Peru (50) also fall.
A matter of perception: Countries’ images abroad In general, there is a strong correlation between a country’s overall competitiveness ranking and its international image as a place to do business overseas. Executives in Singapore are most bullish on their country’s image, while Ireland, Chile, Qatar and South Korea are all far higher on this criterion than in the overall ranking. By contrast, executives in the US, France, Taiwan and Poland are gloomier about their countries’ international images.
“While economic performance changes from year to year, perceptions are longer-term and shift more gradually. They can also lead to a virtuous circle of better image and better economic performance,“ Professor Bris said. “So how executives feel their country is being perceived is a potentially useful guide to future competitiveness developments there.”
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READY FOR TAKEOFF The Global Enabling Trade Report 2014 by the World Economic Forum (WEF) assesses the performance of 138 economies, in four areas: market access; border administration; infrastructure; and operating environment. At the top end of the scale, the index shows Singapore, Hong Kong SAR, and the Netherlands as the most successful countries in terms of enabling trade. The report points to a number of success stories ranging from Chile (8), to Malaysia (25) and Mauritius (29) that have been able to considerably improve their standing through targeted reforms and investments.
Malaysia’s Performance in Enabling Trade
In 2014, Malaysia is ranked 25th out of 138 countries (2012: 24th out of 132 countries). The WEF highlights Malaysia as one of the success stories in enabling trade. Malaysia ranks a remarkable 14th for the availability and quality of transport infrastructure. Maritime connectivity is among the world’s best (5th). The measures by Malaysia’s government to streamline and simplify regulations across its administration are having a positive impact on the efficiency of border administration. As a result, fees for exporting a container from Malaysia are the lowest in the world, according to the World Bank. Yet, the time taken and paperwork it takes to export remain significantly higher than in neighbouring Singapore.
The 2014 A.T. Kearney Foreign Direct Investment Confidence Index is the 14th edition since 1998. It examines overarching trends and ranks countries on how changes in their political, economic, and regulatory systems are likely to affect investment inflows in the coming years. Based on a survey of more than 300 executives from 26 countries and span all industry sectors, the report examines where global investment dollars are likely to be headed over the next 3 years. At the top of the index is the United States, demonstrating sustained investor confidence in the strength of its ongoing recovery. Europe nonetheless has staged an important comeback in the expectations of global business leaders. Eleven European countries are among the top 25 on the list. The four largest European economies; the UK (4th), Germany (6th), France (10th) and Italy (20th), all gained positions from their rankings last year.
A Leap in Investors ‘ Confidence for Malaysia
Malaysia ranked 15th, saw an incredible and encouraging improvement of 10 places. Malaysia aims to build on its competitive position in electronics, automotive, and machinery manufacturing to move up the value chain. “Malaysia’s jump into 15th position from 25th previously, signifies a leap in investor confidence. The index demonstrates investors’ confidence in Malaysia’s capacity to build competitiveness and move up the value chain into high technology and skill-intensive segments”.
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GLOBAL DYNAMICS OF ICT AND INNOVATION
The Global Innovation Index 2013 (GII 2013) ranks 142 countries across the world in terms of their innovation capabilities. The sixth edition is co-published by Cornell University, INSEAD and the World Intellectual Property Organisation. The GII relies on 7 pillars of Institutions; Human Capital and Research; Infrastructure; Market Sophistication; Business Sophistication, Knowledge and Technology outputs; and Creative outputs. The top ten countries are dominated by developed economies. Switzerland, Sweden and United Kingdom are the top 3 countries, followed by Netherlands, USA, Finland, Hong Kong, Singapore, Denmark and Ireland. Innovation success leads to a virtuous cycle, where investment attracts further investment, as well as talent and innovation. Beyond the obvious ingredients for innovation; public, private investment, education and R&D, there is an ecosystem that needs to be built around factors that may be more difficult to define and measure, which has to do with the fact that innovation is not just the result of innovation, but it is also a mindset.
Malaysia in GII 2013 Overall, Malaysia ranks 32nd but comes first among upper-middle income economies in Asia. Malaysia’s major strengths are in market and business sophistication where it ranks 14th and 11th respectively as well as knowledge and technology outputs, ranked 24th. Malaysia needs to make improvements in institutions (49th) and in human capital and research (40th) to move up in the rankings.
The Global Information Technology Report 2014 with the theme Rewards and Risks of Big Data is the 13th edition published by the World Economic Forum in partnership with INSEAD. The reports had accompanied and monitored ICT progress for more than a decade and raised awareness of the importance of ICT for long-term competitiveness and well-being. The top 5 countries in the Network Readiness Index are Finland, Singapore, Sweden, Netherlands and Norway.
Malaysia ranked 30th position out of 148 economies. The report acknowledged that Malaysia is stable and confirms its leadership as the highest ranked economy in Developing Asia. Malaysia maintains a relatively competitive regulatory and business environments, ranked 25th and 24th respectively, and its government continues to use ICT extensively (9th), highlighting the high priority of this sector in the government’s agenda. Business usage (27th) is also strong, as firms invest to adopt new technologies and make the effort to become increasingly innovative. The combination of a favourable environment and an overall high level of ICT usage results in high positive economic (30th) and social (25th) impacts. Malaysia achieved commendable performance in internet and telephony competition (1st); government procurement of advanced technology (4th); venture capital availability (7th); and importance of ICT to government vision, government success in ICT adoption and ICT use & government efficiency were all ranked 9th.
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MAJOR COMPETITIVENESS REPORTS The Malaysia Productivity Corporation (MPC) monitors more than 30 international reports; providing a comprehensive repository of competitiveness data, benchmarks, best practices and information. Among the major competitiveness reports which also form the key performance indicators for monitoring Malaysia’s competitiveness performance globally, include the World Competitiveness Yearbook by the Institute for Management Development (IMD), the Global Competitiveness Report by the World Economic Forum and the Doing Business Report by the World Bank. Malaysia had made great strides in competing with the rest of the World and is the top 6th easiest to do business country and 12th most competitive nation in the World. Malaysia is also placed among the top 20 percent in global competitiveness and is the most innovative among Developing Asia.
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MALAYSIA IN THE WORLD
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CALLING ALL JOURNALISTS
