Malaysia sustains high competitiveness

The Asean Business Outlook Survey 2011 conducted by the American Malaysian Chamber of Commerce (Amcham) is a reflection of continued confidence on Malaysia as an emerging industrial centre in the region. In the survey, US corporations in Malaysia have expressed their satisfaction on efforts of the country to establish a more competitive business environment.

The country's highly competitive labour cost, availability of raw materials and ease of moving products across borders are cited as advantages by senior executives polled from US companies operating in Malaysia. Some 70% of the respondents expected a profit increase this year and 80% forecast an even more bullish outlook next year. A total 20 US companies in Malaysia, which reflected more than 10% Amcham members, participated in the survey which was conducted in May and June this year.

The positive sentiments were also highlighted when 55% of the respondents said that they anticipated that the local economy would expand this year. Malaysia has remained as the primary destination for other US companies in Asean to expand their businesses. About 40% out of a total 327 US companies senior executives in Asean have expressed that they plan to expand here.

"The sentiments and expansion plans by the US companies to Malaysia are in part a testament to the effectiveness of the Government Transformation Programme (GTP) and Economic Transformation Programme (ETP)," according to Amcham president Sanjeev Nanavati. Even whilst economic conditions have changed in the past few months, Mr. Nanavati said that the sentiments would not change.

Global competitiveness also improves

Malaysia has made substantial improvements in its competitiveness, and this was duly noted when it jumped up five positions in the latest Global Competitiveness Report (GCR) by the World Economic Forum (WEF) which is based in Geneva, Switzerland. The country now ranks 21st this year from 26th last year, ahead of nations such as South Korea and New Zealand, in the GCR 2011-2012 which covered 142 countries.

In the Asia-Pacific region, Malaysia is ranked 6th (from 8th last year) whilst Singapore is ranked first, followed by Japan, Hong Kong, Taiwan and Australia.  The WEF defines competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country. The report uses 30% and 70% statistical and survey data respectively, and examined 12 pillars ranging from institutions, infrastructure, financial market development to innovation.

Malaysia achieves a score of 5.08 (compared with 4.88 last year) out of a maximum of seven, and the GCR noted that the higher ranking this year was due to "improvements across the board". The country's progress, according to the report, is particularly noteworthy in the Institutions and Macroeconomic Environment pillars, as well as in several measures of market efficiency. In addition, its macroeconomic situation has improved markedly over the past year to reach 29th place, even though the country continues to run a budget deficit of about 5% of gross domestic product. It was also pointed out that Malaysia had an efficient and sound financial sector which was placed amongst the world's most developed, just behind Singapore and Hong Kong and a highly efficient goods market, ranked 15th.

The Economic Transformation Programme is an initiative by the Malaysian government to turn Malaysia into a high income economy by the year of 2020.  The programme aims to lift Malaysia's Gross National Income (GNI) to $523 billion by 2020, and raise per capita income from $6,700 to at least $15,000 to meet the World Bank's threshold for high income nation. 

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