Correct structural weaknesses to stem drop in competitiveness ranking, says economist

Economist Noor Azlan Ghazali says increasing Malaysia’s competitiveness will require firm decisions and strong commitment, and will likely take time. (Bernama pic)

PETALING JAYA: An economist has urged the government to view the nation’s drop to 34th position in the International Institute for Management Development (IMD) World Competitiveness Ranking as a product of long-term, not short-term, factors.

Noor Azlan Ghazali, the former executive director of the Economic Action Council, said now was not the time for finger-pointing, but to correct the nation’s structural weaknesses.

“Competitiveness is not an impression of annual economic performance markers such as exports and currency value,” Noor Azlan said in a Facebook post.

“Most of the factors it takes into account are structural elements such as taxation, productivity and efficiency, trade regulations, the labour market, institutions, infrastructure and education.

Noor Azlan Ghazali.

“(The drop) did not happen because of short-term factors, last year’s economic climate, rising US interest rates, geopolitical tensions between Ukraine and Russia or the US and China, or low global demand in high-technology products.”

He said increasing Malaysia’s competitiveness would require firm decisions and strong commitment, and would likely take time.

“This is not a headache that can be medicated with two tablets of Panadol. This is structural and systemic,” he said.

Malaysia’s ranking dropped seven places to 34th out of 67 countries in the ranking released on Tuesday.

It also fell four places to 10th out of 14 countries in the Asia-Pacific region, marking the first time it has ranked below Indonesia and Thailand.

Noor Azlan said the drop was also due to the nation’s lack of commitment to realising lasting change, and the blame for it could not be placed solely on the shoulders of the prime minister and government of the day.

“This is an opportunity for the government, industry and public to act together and correct our mistakes or strengthen what is weak, including unsustainable fuel subsidies that threaten the nation’s fiscal standing,” he said.