Published July 10, 2009

WEF report puts M'sia one notch up in economy

Declines in business environment, border administration cited

By PAULINE NG
IN KUALA LUMPUR

	Email this article
	Print article
	Feedback

MALAYSIA turned in a mixed performance in the Global Trade Enabling Report 2009, making strides in the area of market access but falling behind in business environment and border administration.

Climbing up: The 'Global Trade Enabling Report 2009' notes improvements in Malaysia's domestic and foreign market access, upgrading its rank from 68 to 32

According to the report by the World Economic Forum (WEF), the country was rated the 28th most conducive economy out of 121, one notch better than last year.

As a top exporting nation, Malaysia has stepped up efforts in recent years to maintain its attractiveness to investors and businesses in the face of increasing competition. The report noted improvements in domestic and foreign market access. The rank was upgraded from 68 to 32.

Even so, the report indicated declines in border administration which led Malaysia's ranking in the category to fall to 33 from 24 previously. Despite coming in at the top in the area of cost to export and second best after Singapore in cost to import, its average came down due to issues with transparency, time and documentation.

An executive who heads an industry group observed the service at the Customs tended to depend on 'who you appoint as agent and how big you are'.

'My company hasn't had too many problems but we do get complaints - especially from members of smaller firms - that the Customs can be bureaucratic when it comes to approvals. Speed should apply to all regardless of size.'

Crime was also an issue. Reflecting the overall public view that the police have not been effective in stemming crime, the report gave Malaysia a poorer score in the area of physical security. It was ranked 34 in the sub-category of reliability of police services and 66 in business costs of crime and violence.

The report, however, noted a slight improvement in the regulatory environment.

Still, climbing up the rankings has not proved easy. Businessmen say the government machinery is too large and inefficient and that corruption has yet to be significantly reduced.

This was underscored in the WEF Global Competitiveness Report 2008-2009 released in May which cited inefficient government bureaucracy as the most problematic factor for doing business.

Corruption was next, followed by crime and theft, and inflation. Government instability or coups were ranked as least problematic. Businessmen said officers who work hard ought to be rewarded in the form of wage increases so that they are motivated and also less likely to be corrupt.

Many are looking to Pemudah - the special task force comprising of private and public sector executives established in 2007 to facilitate business by reducing red tape - to expand its scope and to help simplify procedures elsewhere after it claimed success in immigration, licensing, land administration, registration of property, company filings and e-payment facilities.