Economic stimulus package to be announced next week should create macro-economic conditions to enhance greater competitiveness such as to attract the return of FDIs
- DAP 37th Anniversary Dinner organized by Kepong DAP Branch
by Lim Kit Siang
(Kuala Lumpur, Friday): Malaysia was recently ranked No. 4 in the World Competitiveness Yearbook 2003 (WCY), a jump of 22 places from the lowly 26th placing in last year’s “rankings on the competitiveness of nations” by the IMD Business School, University of Lausanne, Switzerland.
However, a closer study of the WCY ranking does not really indicate that Malaysia has achieved a quantum jump in competitiveness which it could leverage into great economic benefit and advantage in the coming years.
Firstly, this is because the WCY this year categorises economies into those with populations larger and smaller than 20 million people. Malaysia is ranked No. 4 in the economies with populations larger than 20 million people. By this categorization, Malaysia had only improved by two places, for last year it would have been ranked No. 6 in the scoreboard of countries with more than 20 million people.
It would be pertinent to know what is Malaysia’s ranking when compared to all countries, including economies with less than 20 million people, as Malaysia would have to compete with all economies, whether with populations larger or smaller than 20 million people.
Last year, Malaysia was ranked No. 26 when compared to all the other economies surveyed. Would Malaysia be able to largely maintain its fourth position, or at least in the top ten most competitive nations, when compared with all economies regardless of populations size - or whether it would still be in the band of countries after the first 20 most competitive countries?
The ranking of the 41 countries in the World Competitiveness Scoreboard 2002 were:
According to the 2003 World Competitiveness Scoreboard for “Group 1: Population greater than 20 million”, Malaysia is ranked after USA, Australia and Canada and higher than other countries in the group, including Germany, Taiwan, United Kingdom, France, Spain, five countries which had a better competitiveness ranking in 2002 when there was only one list.
This should be a plus for Malaysia, in overtaking these four European countries in the competitiveness ranking.
However, the ability to make this claim is undermined by the re-ranking of the 2002 competitiveness scoreboard into the two groups of economies larger and smaller than 20 million. For instance, France and Spain, which were ranked No. 22 and 23 respectively in the one-list 2002 scoreboard as more competitive than the 26th-ranked Malaysia, have been re-ranked as less competitive than Malaysia when divided into two categories of larger or smaller than 20 million population.
In the re-ranking for 2002 for economies with more than 20 million population, Malaysia was ranked No. 6, as compared to France and Spain which were ranked No. 9 and 8 respectively.
The IMD Business School has not explained the rationale for the 2002 re-ranking in changing the 2002 competitiveness standing of countries in the group of countries with more than 20 million population, and we are left in the dark as to its reasons. It did point out however that the competitiveness scores in the two groups of economies with population size larger or smaller than 20 million “are not comparable”.
What is noteworthy is that although China was ranked No. 31 last year, five places behind Malaysia, and No. 12 in the 2003 Group One category trailing behind Malaysia’s fourth position, it was China which attracted US$52.74 billion in foreign direct investments (FDI) last year as compared to the paltry US$2.9 billion FDI that came to Malaysia.
Malaysians should not be too euphoric by the latest WCR competitiveness ranking for Malaysia, and the economic stimulus package to be announced next week should create macro-economic conditions to enhance greater competitiveness such as to attract the return of FDIs to Malaysia.
* Lim Kit Siang, DAP National Chairman