Malaysia edges up in WEF competitiveness ladder, but still trails Singapore
Justin Ong
Malay Mail17 October 2018
While Malaysia appears well-poised for IR 4.0, the makers of the report also included a cautionary note about interpreting future-proofing as a necessary indicator of competitiveness. — Reuters picMore
KUALA LUMPUR, Oct 17 — Malaysia is 25th in the World Economic Forum’s (WEF) Global Competitiveness Report 2018 (GCR), just one of three countries without high incomes that broke into the top 40.
This is a one-rung improvement from the previous edition, courtesy of a 1.1-point addition that gave Malaysia an overall score of 74.4 in the index that rates countries on “pillars” ranging from conducive business environments to innovation.
The index is scored from 0 to 100 points; higher scores denote greater competitiveness.
The US remained in top spot (85.8 points) while Singapore also retained its second position (83.5 points).
In South-east Asia, Thailand was 38th with 67.5 points, Indonesia 45th (64.9 points), and the Philippines 56th (64.1 points).
As the report centred around the Fourth Industrial Revolution (IR4.0), its compilers noted the advantage that could be accrued through early adoption of policies embracing this shift towards automation.
“For instance, high-income economies make up the entire top 20 and only three non-high-income economies feature in the top 40: Malaysia (25th), China (28th), and Thailand (38th),” the report said.
The index rates countries on “pillars” that it takes as indicators of competitiveness, both in terms of trade environment, human talent and government regulation.
Of the 12 broad-based pillars, Malaysia performed best in Macroeconomic Stability, in which it was rated the 1st among countries included with a perfect score of 100.
The country also fared well in the Financial Systems (15th) and Business Dynamism (19th), but was weakest in its Labour Market (70th) and Product Market (64th).
While Malaysia appears well-poised for IR 4.0, the makers of the report also included a cautionary note about interpreting future-proofing as a necessary indicator of competitiveness.
It highlighted that of the countries best prepared for IR 4.0, only Switzerland, the US, and Singapore were able to convert this into actual competitive advantages to land themselves in the Top 10 of the index.
The report also cited the difference between Belgium and Malaysia to indicate that competitiveness was just one factor in determining a country’s economic success, noting that both have comparable scores in the GCR but the former boasted a median income that was three times higher.
“As for economies relatively far below the trend line — including Malaysia, Mexico, Indonesia and India — the results suggest their competitiveness performance, if maintained, will promote higher and sustained levels of income in the future.”
Malaysia’s best showing in the index was 18th place in 2015.
The GCR has been compiled annually since 2004 and now features 140 countries.
