Malaysia charts its best performance since 2005

1. The World Economic Forum (WEF) moved Malaysia up two spots, ranking the nation the 18th most competitive economy in the world, in its Global Competitiveness Report 2015-2016. This is Malaysia's highest ranking since 2005 in the highly-influential and closely monitored report, which includes 140 economies. In the context of the current challenging global environment, this upgrade is welcome news for Malaysia. This ranking is also an endorsement of the progress we have made in enhancing efficiency and competitiveness through the Government Transformation Programme (GTP) and Economic Transformation Programme (ETP).

2. Malaysia tops the list among 20 economies under the transition stage from an efficiency-driven to innovation-driven economy. Backed by sound fundamentals, Malaysia is well on track to continue its progress towards high-income developed status in the next five years as we close the gap with GNI per capita at USD10,660 last year.

3. For 1H 2015, GDP was at 5.3 percent and is projected to grow between 4.5 to 5.5 percent for the full year. In the same period, private investment stood at RM108.5 billion contributing 71 percent of total investment, reflecting the private sector’s confidence in Malaysia’s long-term prospects.

4. "The WEF's findings affirm the ETP’s has successful steered the nation out of the middle-income band and continues to build momentum to hit its high-income markers. Despite global volatilities, Malaysia enjoys good growth and is considered as one of the best performing economies for more than five years now. While we appreciate the recognition, we cannot rest on our laurels. The challenges as highlighted by the WEF to ensure economic sustainability and growth, serve as a reminder there is no room for complacency. In an increasingly complex global economic arena, Malaysia as one of the most trade-dependent and open economies in the world has to be extra vigilant given the very volatile nature of global markets," said Dato' Sri Mustapa Mohamed.

5. He also added: “The cross-structural and fiscal reforms put into place over the last five years have played an integral role in creating financial and economic resilience. The government remains committed in institutionalising measures that allow for private sector to flourish in a competitive environment.” 

6. The WEF has highlighted that Malaysia has consolidated its position among the world’s top 20 most competitive economies and remains the highest ranked developing Asian economy. The top 10 of the rankings continues to be dominated by highly advanced economies, led by Switzerland, followed by Singapore, United States, Germany, Netherlands, Japan, Hong Kong SAR, Finland, Sweden and the United Kingdom.

7. The report’s Global Competitiveness Index (GCI) finds a close link between competitiveness and an economy’s ability to nurture, attract, leverage and support talent. The top-ranking countries all fare well in this regard.  With an enhanced competitiveness performance, Malaysia (18th) is ahead of developed economies such as Belgium (19st), Luxembourg (20th), Australia (21st), France (22nd), Austria (23rd), Ireland (24th) and Korea (26th).

8. The GCR is an annual report published by the WEF based on the Global Competitiveness Index that integrates both macro and micro economic aspects of competitiveness. It uses 70 percent perception data obtained through the Executive Opinion Survey from high level private sector executives and 30 percent statistical data. The report comprises 114 criteria which are organised into 12 pillars of competitiveness. The 12 pillars are Institutions, Infrastructure, Macroeconomic environment, Health and Primary Education, Higher Education and Training, Goods Market Efficiency, Labor Market Efficiency, Financial Market Development, Technological Readiness, Market Size, Business Sophistication and Innovation.

9. The Report indicates that Malaysia’s competitiveness lies in goods market efficiency and financial market development pillars in which Malaysia is ranked in the top ten at 6th and 9th positions respectively. Malaysia improves in most of the 12 pillars, with gains in macroeconomic stability (35th, up nine places) as the budget deficit continues to be reduced to the lowest in six years (3.7 percent of GDP); Higher Education & Training (36th, improving by 10 places) and, most notably, technology readiness (47th)  improving by 13 places.

10. Dato' Sri Mustapa said Malaysia was already heeding the WEF  assessment that countries need to ensure higher productivity, nurture innovation, talent and entrepreneurship; and embrace long-term structural reforms to generate resilience for economic downturns.

11. "Malaysia had established a high level Special Economic Committee chaired by the Prime Minister in August this year. Among the objectives of this Committee are to ensure the country’s growth momentum amid the volatile economic conditions globally as well as to ensure the prosperity and quality of life of all Malaysians are intact regardless of all situations. The Government will also continue to ensure successful implementation of the National Transformation Policy which encompasses the economic and government transformation programs," he said.

12. In line with the WEF’s emphasis on higher productivity to address sluggish growth, renewed efforts will be undertaken to boost productivity in a focused and targeted manner with clear outcomes at the national, industry and enterprise level during the 11th Malaysia Plan period, the Minister added.

13. "The Malaysia Productivity Corporation, in partnership with both the public and private sectors, will forge ahead to enhance productivity for global competitiveness and innovation. In addition, there is a need to accelerate good regulatory practices to ensure the quality and effective delivery of public policy which is business friendly and people centric," Dato' Sri Mustapa said.

14. He noted that Malaysia's strong foundation of public-private partnership would help ensure the nation maintains its growth momentum to become one of the top investment and trade destinations in Asia. "While the government will prioritise measures that ensure the country’s growth and prosperity, the private sector will continuously step up efforts to invest in technology, pursue productivity, nurture innovation and talent," Dato' Sri Mustapa said.

Dato’ Sri Mustapa Mohamed
Minister of International Trade and Industry
Kuala Lumpur, Malaysia
30th September 2015