The latest World Competitiveness Yearbook shows that Malaysia has improved on its competitiveness ranking from 28th in 2005 to 23rd out of 61 economies in the World. This volume is released each year by the International Institute for Management Development (IMD) based in Lausanne, Switzerland.
The National Productivity Corp. (NPC), which is a partner institute to IMD, revealed that Malaysia recorded improvements in government and business efficiency, securing the 20th position for each. This improvement was attributed mainly to the continuous efforts to improve the administrative machinery and delivery system, having simpler systems and procedures, and the use of key performance indicators. Business legislation improved in terms of customs authorities, public-sector contracts, international transactions and subsidies.
The improvement in business efficiency was reflected in the productivity growth in three main sectors: agriculture, manufacturing and services.
Malaysia topped the list of 61 economies in terms of competitiveness in labor cost in the manufacturing sector as seen by the yearly decline of unit labor cost.
The country ranked 11th in economic performance and managed to maintain its third position for exports of goods.
Improvements in infrastructure ranking were attributed to investment in telecommunications, communications technology, wider use of computers, development and application of technology and competitive mobile telephone and Internet costs.
"Malaysia is very much in the running for the place of choice for outsourcing services, a clear indicator of its capability to meet the need for excellent infrastructure and required skills to develop its knowledge-based economy," NPC said.
This is good news for the Malaysian government who recently implemented its Ninth Malaysian Plan, the latest five-year comprehensive national development plan, which places great emphasis on the development of a knowledge-based economy to sustain its competitiveness in the face of increasing competition from lower cost economies like India and China.
The improvement in its global competitiveness ranking would seem to suggest that the Malaysian government’s recognition of the fact that the one critical factor that will determine how quickly Malaysia transforms itself from a P- economy to K- economy is the quality of the country’s manpower and is being well addressed in the Ninth Malaysia Plan.