Two rungs lower in competitiveness

MALAYSIA dropped two rungs in global competitiveness ranking to 27 out of 141 countries in the recently published Global Competitiveness Report (GCR) 2019 by the World Economic Forum (WEF). While the country improved 0.2 points to achieve a score of 74.6 in the Global Competitive Index (GCI), it was insufficient for Malaysia to maintain its 25th position in 2018 and was overtaken by Spain and the United Arab Emirates. On the Asean front, Malaysia comes in second after Singapore, which clinched the top spot globally with its score of 84.8, beating the United States. The survey rates economies based on 12 pillars - institutions; infrastructure; information communications technology (ICT) adoption; macro-economic stability; health; skills; product market; labour market; financial system; market size; business dynamism; and innovation capability. Malaysia managed to maintain its score for six pillars and saw an improvement in four pillars. The only two pillars which scored lower this year were health and skills, both under the human capital category. The index is an annual yardstick for policy-makers to look beyond short-term and reactionary measures and to instead, assess their progress against the full set of factors that determine productivity. On a whole, the 2019 results showed that most economies continue to be far from the competitiveness “frontier”, which is the aggregate ideal across all factors of competitiveness. The global average CGI score is 60.7, meaning that the “distance to the frontier” stands at almost 40 points. WEF’S report also demonstrates that productivity-enhancing investments such as new infrastructure, research and development (R&D) and skills development in the current and future workforce have been suboptimal. This is a decade on from the financial crisis where central banks have injected nearly US$10 trillion into the global economy.