Malaysia's competitiveness ranking surged into the top 10 in the world as Asian countries took the first two spots after financial turmoil and an economic crisis saw previous leader, the United States, slipping to third place.
Malaysia's competitiveness ranking rose to 10th, from 18th a year earlier, as the country benefited from strong demand from Asia as well as implementation of efficient policies, especially government policies, said the latest IMD World Competitiveness Yearbook 2010.
“The quantum leap in Malaysia's competitiveness ranking marks a strong recognition of investors accorded to the Government's commitment to reshape the country's competitive landscape,” said CIMB Investment Bank chief economist Lee Heng Guie.
“This improved ranking bodes well for Malaysia to drive for higher private investments and FDIs.”
IMD said Singapore, ranked as the most competitive economy, and Hong Kong displaced the United States off the perch as the two Asian countries displayed great resilience through the recent economic and financial crisis.
Malaysia, which is now ranked the fifth most competitive country in Asia Pacific, scored highly in business and government efficiency.
The rankings are tabulated based on four main criteria; economic performance, government efficiency, business efficiency and infrastructure.
Economists said the jump in ranking is a reflection of the work the Government has put into improving the country's overall business and economic climate.
“It also demonstrates the Government's handling of the global crisis by introducing measures to stabilise the economy,” said Affin Investment Bank economist Alan Tan.
The New Economic Model, the Government Transformation Programme and the Economic Transformation Programme are among the key initiatives that the Government introduced lately to improve the overall business and government environment in the country.
Economists said the improvement in Malaysia's ranking was also due to the perception investors surveyed had of the country, and the challenge now is to translate the jump in ranking into more investments, both foreign and local.
“Being more competitive is positive for the country. It will have some influence on decision-makers,'' said Maybank Investment Bank Bhd head of research Andrew Lee.
“What the Government needs to do is to continue with the Government Transformation Programme and make it known to the outside world that this is happening.''
IMD said for 2010, the challenge for Malaysia was to continuously improve the government delivery system to facilitate business, strengthen the economy through high quality investments, groom small and medium enterprises for global competition, continue to intensify life-long learning and nurture a talented workforce and drive productivity and competitiveness through a creative and innovative mindset.
Lee said that given the more intense and unpredictable environment ahead, policymakers need to quicken the momentum of change to sustain or raise Malaysia's position ahead of the global competition.
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