Act now to stop the decline
The highly rated World Economic Economic Forum’s Global Competitiveness Report 2016-2017, has reduced Malaysia’s ranking drastically by seven places, from 18th out of 140 countries last year to 25th this year.
As the Minister of Trade and Industry Datuk Mustapa Mohamad rightly responded, this is disappointing.
But to many analysts and keen observers, this drop in competitiveness is not surprising. In fact we could wonder how we were ranked higher than Australia, Ireland and even Israel, in the earlier assessments.
Now we ponder as to whether this serious drop in the ranking can turn into a slide?
The least we can do now, is to take it as a real warning that we have to take heed of very acutely.
We cannot afford to simply dismiss this decline in competitiveness casually.
What is thus worrisome is the reaction from the Director General of the Malaysian Productivity Corporation Datuk Mohd Razali Hussain
He stated that “Malaysia continues to lead the region despite losing some ground this year, following six years of improvement.”
We cannot be cavalier orcomplacent in the loss of competitiveness.
Instead we should seriously ask ourselves what went wrong and how and what we can and should do, to prevent any further slide.
The report has carefully analysed 12 pillars for competitiveness – such as institutions, infrastructure, macro economic environment, health and primary education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size business sophistication and innovation.
So the WEC Report has a thorough basis for ranking and rating our competitiveness. And we declined in 8 out of the above 12 pillars.
The areas of decline in competitiveness and where there is a crying need for improvement include: judicial independence, business cost of terrorism, business cost of crime and violence as well as organised crime, secondary and tertiary education enrollment, total tax rate and female participation in the labour force.
Arising from this disappointing report, the Government could introduce a report card to keep track of our efforts to make improvements in our competitiveness.
We could develop a whole range and series of indices and indicators which will clearly show how well we are doing in comparison to world-wide competitors.
It is encouraging that the Minister of Trade has frankly stated that “hopefully we will help improve our ranking in the coming report.”
That ambitious goal, is only possible if we:-
1. Collaborate more closely and effectively with the private sectoar
2. Phase out protectionism,
3. Fight corruption and cronyism more willingly
4. Avoid state capture by making our institutions, like the MACC, the Election Commission, the judiciary and others, much more independent.
5. Encourage a more open and free society, with greater protection of human freedoms and human rights
6. Revise and reform our economic model to face greater global competition on a sustainable basis.
All these pillars and more need to be strengthened to become a more competitive nation which can hold its head high, as we used to do more confidently in the past.
This WEF Report could indeed be a blessing in disguise if we take it as a warning to do more to stop the decline. I hope we will act accordingly with a stronger political will.
We also hope that Budget 2017 will take into account the findings of the WEC Report on Competitiveness, as well as some of the above ideas.