Malaysia's ranked 23rd in Doing Business

Malaysia ranked 23rd in Doing Business poll
2009/09/09

MALAYSIA dropped three rungs to rank 23rd out of a total of 183 economies surveyed in the World Bank's Doing Business 2010 Report released today.

Ranked fourth overall in Asia, Malaysia for the third consecutive year became the easiest place to get credit in the world, as well as the cheapest cost in Asia to export per container at US$450, and the second lowest to import at US$450.

Malaysia, placed 24th overall two years ago, was ranked fourth in protecting investors, paying taxes (24), trading across borders (35), closing a business (57), enforcing contracts (59), employing workers (61), registering property (86), starting a business (88) and dealing with construction permits (109).

The World Bank said Malaysia eased business start-up with a new one-stop shop to streamline registration, adding that the service was still new and the government was planning a public awareness campaign about the new system.

In addition, the Malaysian Institute of Chartered Secretaries and Administrators (Maicsa) reduced company incorporation charges and corporate fees. "Enforcing contracts through the courts was made easier by increased staff and stricter deadlines that have shortened case filing times from 45 days to 30.

"In addition, the commercial court has been reorganised to dispose of interlocutory matters more swiftly," the bank said.

Singapore, a consistent reformer, is the top-ranked economy on the ease of doing business for the fourth year in a row, with New Zealand in second place and Hong Kong third. Thailand is ranked third in Asia and 12th in the world, one rung better than the previous year.

Among the other south east asian countries, Vietnam is ranked 93rd, the Philippines 144th, Laos 167th, Indonesia 122nd, Cambodia 145th and Brunei 96th.

The World Bank said Singapore introduced online and computer-based services to ease business start-up, construction permits, and property transfers.According to the "Doing Business 2010:
Reforming through Difficult Times", between June 2008 and May this year, a record 131 of 183 economies around the globe reformed business regulation.Indonesia, the region’s most active reformer, moved up to 122nd spot from 129th on the global ease of doing business rankings.


"Business regulation can affect how well small and midsize firms cope with the crisis and seize opportunities when recovery begins," said Penelope Brook, Acting Vice President for Financial and Private Sector Development at the World Bank Group.

He said the quality of business regulation helps determine how easy it is for troubled firms to survive difficult times and the speed at which local entrepreneurs would star.Other reforms occurred throughout the region, said the report, citing among others China, ranked 89th, which made it easier for domestic firms to trade by relaxing rules on trade credit. - Bernama

Why did we go lower in the world competitiveness ranking?
Making a Point - By Jagdev Singh Sidhu

B>What should we do to make it better?
A FEW years back, an editor from a large Indian newspaper told me that the news from a country that is carried around the world shows what the world thinks of that country.
He was making a point to illustrate how the world was taking India a little more seriously.
Prior to India’s economic boom, he said newspapers from the Western world carried mainly human interest stories from India, the more degrading the better the chance of it seeing print.

If a man had cut off his tongue, then that will be the news from India.
But as India’s economy, society and influence grew, the news the world was reading about India consequently changed.

Countries started carrying news articles about India’s economic prospects, political influence and potential, all of which builds on the perception of India.

And perception of what the world thinks of a country can be a powerful force in the world of business and investment.

That was most recently displayed in Malaysia’s ranking in the World Competitiveness Report.
Our ranking slipped three notches to 24 and that was largely a result of the perception among executives surveyed that Malaysia is worse off than a year ago, in particular the area of institutional framework, which is influenced heavily by the Government.

Whether that is real is debatable but again perception influences decisions.
And if the news the world is reading moulds the perception of a country, what must the world be thinking after reading or watching news from Malaysia over the past one month?

First, there was news that Kartika Sari Dewi Shukarno would receive six lashes of the cane for drinking beer.
Then the world was treated to news that Selangor, the most industrialised and arguably most forward state in the country, was considering a ban on the sale of alcohol.
And finally, we have the emotionally charged cow-head protest over the relocation of a Hindu temple in Shah Alam.

Such news from a moderate and multiracial country would have been surprising to many around the globe, especially to the country’s largest investors.

It could be even more surprising to them considering the news from Malaysia over a decade ago used to be more about its economic prowess and growing political influence.

After all, in a growing and competitive world, perception can influence the flow of money and investments.

And if people, after reading such news, start to form opinions that could negatively influence the perception they have on Malaysia, then such news could have implications on investments into the country.

That is something the country must avoid as it will have consequences on job and wealth creation.

Amidst all the negativity, the one sliver of good news, however, has come from a David vs Goliath case involving McCurry vs McDonald’s.

The eight-year court battle over the right to use the “Mc” prefix has seen the small one-shop curry house in Jalan Ipoh emerge victor against a global franchise giant.

News of the Federal Court’s verdict was flashed all around the world, and in most cases elicited a smile across the faces of many.

It’s the type of reaction Malaysia could do more with.
·Jagdev Singh Sidhu is a deputy news editor at The Star. He thinks we should be concerned about what people think about us.

Thursday September 10, 2009
Malaysia’s lower ranking in competitiveness worries economists
By JAGDEV SINGH SIDHU

They say weaknesses identified by WEF report must be addressed
PETALING JAYA: The slide in Malaysia’s ranking in the World Competitiveness Report is a source of concern and efforts need to be redoubled to correct the weaknesses identified by the report.

“We should use the report as a wake-up call to refocus our efforts to address areas where we have fallen behind,” said RAM Holdings Bhd chief economist Dr Yeah Kim Leng.

The World Economic Forum (WEF) released its World Competitiveness Report 2009/10 on Tuesday that showed Malaysia tumbled three spots from 21 to 24.

The WEF said Malaysia’s decline was more a result of poor assessment of the country’s institutional framework, which has fallen from 17th to 43rd position in two years.

“The institutional environment is determined by the legal and administrative framework within which individuals, firms and governments interact to generate income and wealth in the economy,” said the report.

The other concerns were about security and crime, and the report also voiced concern about the size of Malaysia’s budget deficit.

“There are issues that need to be addressed especially on the budget deficit,” said Affin Investment Bank economist Alan Tan.

Yeah felt that Malaysia needed to look at the Global Competitiveness Report as a gauge to improve its pace. He said there was an urgent need to improve the delivery system of the public sector.

“Even though we’re still undertaking reforms, we are still lagging. We need to accelerate the focus on KPIs (key performance indicators) so that performance would filter down to the operating levels.”

Yeah added that foreign investors would look at the report as a guide on where to place their money. “The higher we are (on the report) the more attractive we will be to foreign investors and the more likely we will be on their radar,” he said.

Yeah, however, said that most foreign investors would perform assessments of their own first before finally making a choice.

“Our ability to attract foreign investors would usually depend on their experience with a particular company at the individual level.”

While the report was not flattering for Malaysia, one economist felt steps taken in recent months under the administration of Datuk Seri Najib Tun Razak were not captured by the report.

“Since the beginning of this year, Najib has come up with initiatives to liberalise the services industry. Also, bumiputra equity requirements for the capital markets were relaxed. I don’t think this has been factored yet,” said United Overseas Bank Ltd economist Ho Woei Chen.
CIMB Investment Bank Bhd economic research head Lee Heng Guie said there was a greater need to increase the Malaysian security system.

“This calls for greater urgency to rectify our competitive disadvantages in key areas such as crime prevention, legal system and investor protection so as to strengthen Malaysia’s position as the preferred investment destination amid the fast catching up of new players,” he said.
Lee added that while Malaysia had stepped up efforts to improve the public sector’s delivery services, foreign investors still ranked the country low in areas facilitating goods market efficiency.

“These include the time and number of procedures required to start a business, prevalence of trade barriers and the intensity of local competition.

“While we reckon that Pemudah (The Special Task Force to Facilitate Business) has achieved commendable progress to improve the delivery services, more needs to be done to undo any inefficiency that stifles private sector initiatives,” he said.