Lower Competitiveness Ranking Will Not Hurt Investor Sentiment Towards Malaysia - Don

By Zairina Zainudin KUALA LUMPUR, June 2 (Bernama) -- Investor sentiment towards Malaysia's economy remains intact despite the country's competitiveness ranking slipping five notches to 24th position, Sunway University’s Business School Prof Dr Yeah Kim Leng said. He said the ranking would not have much immediate impact, especially among investors, be it local or foreign, since their sentiment was driven more by short-term factors such as growth prospects and current economic and financial conditions. “The concern is over the longer term since the erosion of the competitiveness factors is ultimately linked to the decline in productivity, investment and growth potential,” he told Bernama. Malaysia slipped to 24th position from the 19th position in the World Competitiveness Yearbook 2017 compiled by The Institute for Management Development’s World Competitiveness Centre based in Lausanne, Switzerland. Despite the decline, Malaysia remains in the top 25 most competitive nations among 63 economies, including Hong Kong, Switzerland, Singapore, the US, and the Netherlands. The report showed that Malaysia had improved in selected indicators for its economy such as consumption tax, stock market capitalisation, and real gross domestic product (GDP) growth. Yeah said higher-ranked countries, over time, would attract higher domestic and foreign investment, given their better underlying business and investment climate and conditions. While Malaysia's economic and competitiveness fundamentals may have improved in recent years, other countries are moving ahead at a faster pace. “To keep up, we will have to accelerate the implementation of the various transformation programmes and be bold to address deep-seated problems and structural issues that have impeded the public and private sectors from operating at a higher efficiency and productivity level,” he added. Last year, Malaysia's labour productivity grew 3.5 per cent to US$18,271 (RM78,218) from US$17,648 (RM75,548) in 2015, largely contributed by higher productivity level in the manufacturing and services sector, which improved 1.4 per cent to US$24,928 (RM106,647) and 2.8 per cent to US$15,923 (RM68,166), respectively. -- BERNAMA