KUALA LUMPUR: Malaysia jumped from 32nd to 27th in the 2023 IMD World Competitiveness Ranking (WCR), reflecting investor confidence and reaffirming the country’s commitment to current economic policies and strategic direction as the preferred destination for investment and trade.
Sunway University economics professor Dr Yeah Kim Leng said the recent success underlined the country’s commitment to present economic policies and strategic orientation as the preferred location for investment and trade.
“It is also a recognition of the rising level of foreign direct investment as well as investor confidence in our economic performance.
“In addition, the consistent rise will encourage the government to focus on other areas that have been identified as needing more attention such as human capital development, digital and business regulatory reforms, and sustainable development,” he said.
According to the IMD, Malaysia ranked 27th in the world’s most competitive economies in 2023, up from 32nd in 2022, thanks to economic recovery, investment growth, and bright spots in exchange rate stability and the labour market.
While Malaysia’s strengths include prices, basic infrastructure, and tax policies, the IMD noted that the country fell short in the following sub-factor rankings: business legislation, education, and sociocultural framework.
On that point, Yeah stated that there is still room for improvement in terms of ease of doing business and regulatory burden reduction.
“The quality of education must also be improved to ensure a supply of talent that meets industry skill needs,” he said, adding that social cohesion should be further enhanced through inclusive policies and national efforts to promote unity.
Meanwhile, Bank Muamalat Malaysia Bhd head of economics and social finance Afzanizam Abdul Rashid said the current development in the IMD ranking showed that the government is on the correct route to steer the country towards becoming a developed nation.
“Being competitive would imply, among other things, ease of doing business, clarity and consistency in policy, and a credible legal framework that allows businesses to thrive.
“This, in turn, could lead to additional employment from our skill pool, particularly among graduates,” he said.
Putra Business School economic analyst Dr Ahmed Razman Abdul Latiff explained that the ranking is based on hard data as well as the perception of global managers.
“With political stability achieved last year, it improved the perception of managers in Malaysia’s economic prospects as well as its competitiveness.
“Last year also saw Malaysia’s gross domestic product growth soar to 8.7 per cent, which indicates the competitiveness as well,” he said.
Ahmed Razman further said that the improvement in prices was due to the country’s ability to keep the inflation rate low compared to other ASEAN countries.
The IMD World Competitiveness Report is based on 336 competitiveness criteria divided into four categories: economic performance, government efficiency, corporate efficiency, and infrastructure.
Malaysia, ranked 27th out of 64 economies, improved in all four competitiveness categories, indicating the country’s optimistic and resilient success in the face of global economic uncertainties and crises, as well as multifaceted domestic obstacles.
Denmark held on to its top spot in the list for the second year in a row, Ireland moved from seventh to second while Switzerland went down a rung to third.
Source: https://www.thesundaily.my/local/economists-improvement-in-imd-wcr-reflects-investors-confidence-in-malaysia-LC11132229