WEF Ranks Malaysia The World's 8th Most Efficient Government. But Are We Really Worthy?
In terms of efficiency, Malaysia places ahead of Switzerland and Luxemborg in the World Economic Forum's (WEF) overall global ranking of the world's governments.
By Samantha Khor — 15 Jul 2015, 02:37 PM
The World Economic Forum (WEF) has ranked Malaysia as the 8th most efficient government in the world, ahead of Switzerland (9th) and Luxemborg (10th), based on its annual Global Competitiveness Report
Efficiency and competitiveness of 144 of the world's governments is evaluated based on the wastefulness of government spending, burden of regulation, and transparency of policy-making - amongst other factors - to produce an overall global ranking
The efficiency of government has a significant bearing on a country’s competitiveness and economic growth. Excessive bureaucracy and regulation, a lack of transparency, and inadequate legal frameworks all impose additional costs on business and impede expansion.
weforum.org
According to the WEF, an efficient government should be optimising public funds for its country's development and growth. However, the first AG report of 2014 - released in April 2015 - revealed several holes in terms of the management of public funds by several Malaysian ministries.
Further disparaging WEF's rankings is the placement of Qatar at the top of the list. The Independent UK describes the oil-rich country as "an autocracy where women are discriminated against, migrant workers are exploited and free speech is curtailed".
Even more ironically, the Gulf state was recently implicated in possible money laundering cases linked to FIFA's decision to host the 2022 World Cup in Qatar.
On Monday (13 July), Swiss federal prosecutors announced they had uncovered evidence of 28 acts of possible money laundering linked to the bidding process for the 2018 and 2022 World Cups, won by Russia and Qatar respectively. The investigation into how the tournaments were awarded is ongoing, with both countries denying any wrongdoing.
The Global Competitiveness Report 2014/2015, which was released in September last year, places Malaysia in the 20th spot in terms of economic competitiveness compared to 24th in 2013/2014. Malaysia is also the best-ranked out of the Emerging and Developing Asian nations ahead of South Korea, China, and Thailand.
However, economic progress is still marred by several factors. corruption, access to financing, and crime and theft are perceived to be the top three problematic factors for doing business in Malaysia
In a region plagued by corruption and red tape, Malaysia stands out as one of the very few countries that have been relatively successful at tackling these two issues, as part of its economic and government transformation programs.
weforum.orgOther Asian governments that are included in the top 10 are Singapore (2nd) and Hong Kong (4th). Here's the complete list of the most efficient governments according to the WEF:
On the other side of the spectrum, Venezuela emerged as the least efficient government followed by Italy and Argentina. The bottom 10 list reads as follows:
Meanwhile, Foreign Policy Magazine ranks Malaysia as the 6th most attractive destination for foreign investors, climbing 5 spots from last year and placing ahead of Indonesia (12), Vietnam (23), Philippines (30), and Thailand (38). Malaysia and Singapore are the only ASEAN countries in the top 10.
Introduced by Daniel Altman, an adjunct professor of New York University’s Stern School of Business since 2013, the Baseline Profitability Index (BPI) uses a holistic approach based on eight factors that will affect the ultimate success of a foreign investment.
These factors encompass (i) economic growth; (ii) financial stability; (iii) physical security; (iv) corruption; (v) expropriation by government; (vi) exploitation by local partners; (vii) capital controls, and (viii) exchange rates. Additionally, the BPI calculation also incorporates changes made by the World Bank in its measurement of gross domestic product (GDP) such as the revised method to compare living standards across countries.
bloombergtv.my
PM Najib Razak expressed his gratification for Malaysia's latest rankings, saying that the government will continue to provide for the people and the country's investors in spite of the challenges the government is facing right now
"The latest rankings place Malaysia as the 6th most attractive destination for foreign investors by Foreign Policy and the 8th most efficient government by the World Economic Forum.
At a time when some parties are discrediting the country and the Government's efforts, we continue to strive to provide the best service to the people as well as to create a competitive and investor-friendly environment for investors," he wrote.