asean vs east asia and paciic - malaysia productivity ... the report report highlights global...

About The Report

Report Highlights

Global Competitiveness Index (GCI) 2017-2018 Overall Rankings

Top 10 Countries

Malaysia’s Performance among APEC & ASEAN Community

ASEAN vs East Asia and PacificMalaysia’s Performance 2008-2017

Performance by Pillar

Malaysia’s Competitiveness Landscape

Pillar 1: Institutions

Pillar 2: Infrastructure

Pillar 3: Macroeconomic Environment

Pillar 4: Health and Primary Education

Pillar 5: Higher Education and Training

Pillar6:GoodsMarketEfficiency Pillar7:LaborMarketEfficiency Pillar 8: Financial Market Development

Pillar 9: Technological Readiness

Pillar 10: Market Size

Pillar 11: Business Sophistication

Pillar 12: Innovation

Way Forward: Accelerating Implementation

The Competitiveness Marathon

Learning from Others

Classification by Each Stage of DevelopmentFast Facts

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MPC | GLOBAL COMPETITIVENESS REPORT 2017-2018 1

ABOUT THE

REPORT

Countries

Qualitative

Since

1979

Indicators

12Pillars

Quantitative

GlobalCompetitiveness

Index

GlobalCompetitiveness Report 2017-2018

137

114

70%

30%Published

MPC | GLOBAL COMPETITIVENESS REPORT 2017-20182

REPORTHIGHLIGHTS

Global Competitiveness Index (GCI) 2017-2018

methodology, used 114 indicators comprising

34 quantitative data (30%) and 80 qualitative

data (70%). Quantitative data were derived

from internationally recognized organizations,

notably the International Monetary Fund (IMF);

the World Bank; and various United Nations’

specialized agencies, including the International

Telecommunication Union, UNESCO, and the

World Health Organization. The GCI also includes

indicators derived from the World Economic

Forum’s Executive Opinion Survey (EOS) that

reflect qualitative aspects of competitiveness,

or for which comprehensive and comparable

statistical data are not available for a sufficiently large number of economies.

With an enhanced competitiveness

performance, Malaysia (23rd) continues to be

ahead of economies such as Korea Rep. (26th),

China (27th), Iceland (28th), Estonia (29th) and Saudi

Arabia (30th).

The GCI takes the stages of development

into account by attributing higher relative

weights to those pillars that are more relevant

for an economy given its particular stage of

development. To implement this concept, the

pillars are organized into three sub-indexes, each

critical to a particular stage of development.

Malaysia falls between two stages and considered

to be in transition between efficiency enhancer sub-index and innovation and sophistication

factors sub-index countries with GDP per

capita between USD9,000 to 17,000. Among 20

economies in this transition stage, Malaysia is the

most competitive economy ahead of countries

such as Saudi Arabia (30th), Chile (33rd), Poland

(39th), and Turkey (53rd).

Among Asia-Pacific Economic Cooperation (APEC) countries, Malaysia ranked 9th after United

States, Singapore, Hong Kong SAR, Japan, New

Zealand, Canada, Taiwan, and Australia and ahead

of Korea, Rep. (10th), China (11th), and Thailand

(12th).

Most of the ASEAN countries had improved

their ranking respectively including Malaysia to

23rd position (25th). Brunei Darussalam made

the largest strides improving their ranking by 12

places to rank 46th (58th). Thailand climbed two

places to rank 32nd; Indonesia improved 5 places

to rank 36th, Vietnam increased 5 places to rank

55th and the Philippines improved one place to

rank 56th. Laos and Cambodia, however dropped

five places to rank 98th and 94th respectively.

Despite declining by 1 position, Singapore at 3rd

position remained the most competitive economy

in the region.

This Report identifies insights from the 12 pillars that are particularly relevant to growth and

development in the context of competitiveness

of a country. It assesses factors that contribute

not only to productivity but also to other

societal goals, such as inclusion, mobility, and

sustainability.

The Global Competitiveness Report 2017-2018, released by the World Economic Forum (WEF) on 27th September 2017, ranked Malaysia 23rd out of 137 economies with a score of 5.17 improving two positions as compared to 25th position out of 138 economies with a score of 5.16 previously overtaking Ireland (24th) and Qatar (25th).


At the indicator level, the following indicators

achieved top 10 position have contributed

significantly to the performance of pillars and overall rankings:

i. Inflation1, ranks 1st (1st);

ii. Strength of investor protection, ranks

3rd(4th);

iii. Government procurement of advanced

technology products, ranks 4th (3rd);

iv. Burden of government regulation, ranks 5th

(6th);

v. Pay and productivity, ranks 5th (6th);

vi. Agricultural policy costs, ranks 7th (8th);

vii. Availability of scientist and engineers, ranks

7th (7th)

viii. Extent of staff training, ranks 9th (9th);

ix. Venture capital availability, ranks 9th (6th);

and

x. Extent of marketing, ranks 10th(9th);

Health & Primary Education pillar improved

significantly recording double digit (14 places) improvement to 30th position from 44th last year. The

contributing indicators to the improvements are:

i. Primary education enrollment rate, ranks

32nd (77th), improved 45 places;

ii. HIV prevelance, ranks 73rd, (85th), improved

12 places;

iii. Turberculosis Incidence, ranks 90th, (93rd),

improved 3 places; and

iv. Infant mortality, ranks 44th, (45th), improved

1 place.

Pillars that maintained their positions are Market

Size, ranks 24th, Business Sophistication, ranks 20th

and Innovation, ranks 22nd.

Pillars that declined in rankings are Institutions,

ranks 27th (26th), Higher Education and Training,

ranks 45th (41st), Goods Market Efficiency, ranks 20th (12th), Labor Market Efficiency, ranks 26th (24th),

Financial Market Development, ranks 16th (13th) and

Technological Readiness, ranks 46th (43rd).

Of the 6 declined pillars, Goods Market Efficiency pillar declined the most by 8 places. Among the

indicators that contributed to the decline are:

i. Number of procedures to start a business2,

ranks 104th (11th), declined 93 places;2

ii. Time to start a business, ranks 94th, (15th),

declined 79 places;2

iii. Prevalence of non-tariff barriers, ranks 34th,

(19th), declined 15 places;

iv. Business Impact of rules on FDI, ranks

50th,(41st), declined 9 places;

v. Effect of taxation on incentives to invest,

ranks 21st, (14th), declined 7 places; and

vi. Prevalence of foreign ownership, ranks 36th,

(30th), declined 6 places.

REPORT HIGHLIGHTS


According to WEF, analysis of the Global

Competitive Index (GCI) also points to 3 main

challenges that are relevant for economic progress

and policy action. These include:

i. The need to maintain a sound financial sector to prevent recessions with deep and

long-lasting effects on productivity and

growth;

ii. Finding balance between innovation and

technological adoption, particularly those in

emerging economies such as China and

India to enable widespread of innovation’s

potential economic and societal impact; and

iii. Flexibility in the labour market and worker

protection to ensure competitiveness,

especially within the technological era;

pointing to the fact that rapid technological

progress would require reallocation of

workers.

WEF also indicated the intention of updating the

methodology used in assessing competitiveness.

The amendment which would include new concepts

and indicators, is in line with the most recent

competitiveness challenges and developments in

the areas of productivity, innovation and growth.

WEF would only utilise the new methodology on

an incremental phase, commencing 2018. The

new methodology would reduce the share of

perception data (from some 71% to less than 50%)

and provides for a more objective analysis, with the

availability of hard data.

Notes:

1 Countries with inflation rate within the range of 0.5% to 2.9% received the highest score of 7 hence number 1 ranking. Malaysia share this top

position with other countries such as Portugal, New Zealand and United Kingdom.

2 Engagement and improvement on these indicators have been conducted by PEMUDAH’s Focus Group on Starting a Business in the World Bank

Doing Business Report since October 2016. Rebuttal session with the World Bank research team was completed before the deadline in June 2017.

The results will be announced on 31st October 2017 with the launch of Doing Business 2018 report.


GLOBALCOMPETITIVENESS INDEX2017 - 2018


TOP10COUNTRIES


MALAYSIA’SPERFORMANCE AMONGAPEC & ASEAN COMMUNITY

29MALAYSIA’S

RANKING IN ASEANMALAYSIA’S

RANKING IN APEC COUNTRIES

New Zealand

Australia

Indonesia

Singapore

Malaysia

Thailand

Vietnam

Philippines

Korea

China

Russia

Canada

United States

Mexico

Peru

Chile

Japan

Brunei

Papua New Guinea

Hong Kong, China

Chinese Taipei


ASEAN COUNTRIES vsEAST ASIA AND PACIFICANALYTICAL DIAGRAM

7th pillar : Labor Market Efficiency8th pillar : Financial Market Development

9th pillar : Technological Readiness

10th pillar : Market Size

11th pillar : Business Sophistication

12th pillar : Innovation

1st pillar : Institutions

2nd pillar : Infrastructure

3rd pillar : Macroeconomic Environment

4th pillar : Health and Primary Education

5th pillar : Higher Education and Training

6th pillar : Goods Market Efficiency


MALAYSIA’S PERFORMANCE2008 - 2017

2017-2018

2016-2017

2015-2016

2014-2015

23rd

25th

18th

20th

score 5.17

score 5.16

score 5.23

score 5.16

2013-2014

24th

score 5.03

2012-2013

25th

score 5.06

2010-2011

26th

score 4.88

2011-2012

21st

score 5.08

2009-2010

24th

score 4.87

2008-2009

21st

score 5.04


PERFORMANCEBY PILLAR

Institutions Infrastructure

MacroeconomicEnviroment

Health andPrimary

Education

Goods Market Efficiency

BusinessSophistication

TechnologicalReadiness

Labor MarketEfficiency

Market Size

HigherEducation

and Training

Innovation

Innovation & Sophistication Factors2017-2018 2016-2017

Financial Market Development

Efficiency Enhancers2017-2018 2016-2017

24th24th

20th21st

Basic Requirements2017-2018 2016-2017

26th24th

RANK

RANK

2017-2018

2017-2018

2016-2017

2016-2017

20th

22nd

20th

22nd

RANK

2017-2018 2016-2017

45th 41stRANK

2017-2018 2016-2017

46th 43rd

RANK

2017-2018 2016-2017

20th 12thRANK

2017-2018 2016-2017

24th 24th

RANK

2017-2018 2016-2017

26th 24th

RANK

2017-2018 2016-2017

16th 13th

RANK

2017-2018 2016-2017

30th 44th

RANK

2017-2018 2016-2017

34th 35th

RANK

2017-2018 2016-2017

22nd 24th

RANK

2017-2018 2016-2017

27th 26th


MALAYSIA’SCOMPETITIVENESSLANDSCAPE

Foreign currency regulations 9.2

Tax rates 7.9

Corruption 7.4

Inadequately educated workforce 7.0

Government instability/coups 6.4

Poor work ethic in national labor force 6.1

Restrictive labor regulations 5.9

Policy instability 4.8

Tax regulations 4.5

Inadequate suppky of infrastructure 4.3

Crime and theft 0.9

Poor public health 0.4

Most problematic factors for doing business

problematic factors for doing business in their country and to rank them between 1 (most problematic) and 5. The score corresponds to

the responses weighted according to their rankings.

0 4 8 12 16

23rd/137The Global Competitiveness Index 2017-2018 edition

Key Indicators

Population

GDP GDP (PPP)

GDP per capita

Performance overview

Global Competitiveness Index

1st pillar: Institution 27 5.0

2nd pillar: Infrastructure 22 5.5

3rd pillar: Macroeconomics environment 34 5.4

4th pillar: Health and Primary education 30 6.3

5th pillar: Higher education and training 45 4.9

8th pillar: Financial market development 16 5.0

9th pillar: Technological readiness 46 4.9

10th pillar: Market size 24 5.1

12th pillar: Innovation 22 4.7

Rank/137Score

(1-7)Trend

Distance

from best

Subindex A: Basic requirements 24

23 5.2

5.5

24 4.9

21 4.9

Index Component

31.7

296.4

millions

US$ billions

US$

% world GDP

9,360.5

0.72

9,556.8

0.72

Rank

Edition

Score

25/144

2012-13

5.1

24/148

2013-14

5.0

20/144

2014-15

5.2

18/140

2015-16

5.2

25/138

2016-17

5.2

23/137

2017-18

5.2

1

7

1st pillar:Institutions

2nd pillar:Infrastructure

3rd pillar:Macroeconomicenvironment

4th pillar:Health and primaryeducation

5th pillar:Higher educationand training

6th pillar:Goods market

7th pillar:Labor market

8th pillar:Financial market

development

9th pillar:Technological

readiness

10th pillar:Market size

11th pillar:Business

sophistication

12th pillar:Innovation

11111111111

Malaysia

31.0

296.2

2016 2015 2016 2015


WAY FORWARD:ACCELERATINGIMPLEMENTATION

WEF has outlined several steps in accelerating competitiveness agendas as follows:

Malaysia continues to be ranked by the World Economic Forum’s Global Competitiveness Report (GCR) in its 39th publication, as the most competitive economy among developing countries in Asia. Malaysia overtakes Ireland and Qatar and remains ahead of economies such as Republic of Korea, China, Iceland and Estonia. It is essential to note that all countries ranked above Malaysia are developed and high income economies.

In the GCR 2017-18, Malaysia ranks 23rd among 137 economies advancing 2 spots from 25th the previous year. In terms of scores, our performance improved to 5.17 from 5.16 of a maximum of 7. Meanwhile, countries and territories that slipped in their ranking include Singapore, Sweden, United Kingdom, Japan, Taiwan, UAE, Belgium, Australia and France.


In line with the recommendation by WEF, various strategic initiatives have been undertaken and will continuously be intensified to enhance Malaysia’s performance. They include:

WAY FORWARD:ACCELERATINGIMPLEMENTATION

1

2

3

4

5

Post Release ofCompetitiveness ReportsEngagements Sessions

Dissemination of informationthrough printed and

electronics publications

Data management programmeby Civil Service Delivery

Unit (CSDU)

Formation of OversightCompetitiveness Committee (OCC)

to monitor Key PerformanceIndicators (KPI) in the MDAs

(Ministries, Departments andAgencies)

Benchmarking and BestPractices activities

6

7

8

9

10

Strengthening Collaborationwith Academia and

International Organizations

PEMUDAH Task Force to helplift Malaysia's international

rankings by simplifyingprocesses and reducing costs

Productivity Nexus – Publicand private collaborationto intensify productivity

growth and competitivenessof selected sectors

Competitiveness Working Group(CWG) between MDAs

CompetitivenessTask Force – focusing on

achieving the KeyPerformance Indicator (KPI)stipulated for each ministry


COMPETITIVENESSM A R A T H O N


LEARNINGFROM OTHERS


CLASSIFICATIONBY EACHSTAGE OF DEVELOPMENT


FAST FACTSGCI 2017-2018 : SUBINDEX

Number Of INDICATOrS


FAST FACTSTHE GLOBAL COMPETITIVENESS INDEX2017-2018 AND 2016-2017


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