UNMISTAKABLE SIGNS OF ECONOMIC DOOM BUT NAJIB & CO PRETEND NOT TO NOTICE: MALAYSIAN COMPETITIVENESS PLUNGES 7 PLACES

The  highly rated World Economic Economic Forum`s Global Competitiveness Report 2016-2017, has  reduced  Malaysia`s ranking drastically  by  7 places, from  18 out of 140 countries last year,  down to  25th place this year! As the Minister of Trade and  Industry  Datuk Mustapa Mohamad rightly  responded – this  is “disappointing“!

But to many analysts and   keen observers, this  drop in competitiveness  is  not  surprising.  In fact  we could  wondered  how  we  were  ranked   higher  than  Australia and Ireland  and even Israel, in the  earlier  assessments. Now we ponder as to whether this serious drop in the ranking can turn into a slide?

The least we can do now, is to take this drop in competitiveness, as  a real  warning that we  have to take heed of  very  acutely. We cannot afford to simply   dismiss this decline in competitiveness casually or even attempt to gloss over it. What is thus worrisome is the reaction from the Director General of the Malaysian Productivity Corporation Datuk Mohd Razali  Hussien. He  stated  that

“Malaysia continues to lead the region despite losing some ground this  year, following  six years of  improvement“ We cannot  be  cavalier  of  complacent  in the  loss  of competitiveness, can we?

Instead we  should  seriously ask  ourselves  – what   went   wrong  and how and what we can and should  do, to  prevent  any  further  slide from  happening? Any declining trend can be disastrous!

The  Competitiveness Report  has  carefully analysed 12  Pillars for Competitiveness – such as Institutions, infrastructure,  macro economic  environment,  health  and primary education and training, goods market efficiency, labour market efficiency,  financial market  development  , technological  readiness , market size  business sophistication and innovation. So the WEC Report has a  thorough basis  for  ranking and  rating our competitiveness. We should not therefore down play  its  findings as erronous!

And we declined in 8 out of the above 12 Pillars! That is sadly even more disappointing and disconcerting! The  areas of  decline in competitveness  and where  there is a crying need  for  improvement  are   the following —  Judicial Independence, business cost of Terrorism, business cost of  crime  and violence as well as  organised  crime , secondary and tertiary education enrollment, total tax rate female participation  in the labour force, etc.

But  strangely  these  issue   are  not  adequately  discussed and  debated  in Parliament  as well as  the press  and in public dialogue .

How come?  Are these  issues  not  fundamental to  our  future well being, productivity  and competitiveness?

Need for Government   Report  Card on Competitivenes

Arising from this  disappointing  World Economic Forum Report , the Government  could introduce  a Report Card on  Competitiveness,  to keep track of our   efforts  to make  improvements in our  competitiveness and to improve and  even excel.   We could    develop  a  whole range and series of  Indices and Indicators  which will clearly  show  how well we  are  doing in comparison to world wide  competitors  and  not   only  within our own country.

Recommendations –

In order that we  learn from our  mistakes and to   arrest any  further decline  or slide in our global competitivess ,  the  Government   has  to explain to the Malaysian public how  it plans to  improve  our  competitiveness  world wide? It is  encouraging that the  Minister  of Trade   has   frankly  stated that –  “Hopefully  we  will help improve  our ranking in the coming  Report“,
But YB that ambitious goal, is only possible  if  we —
1. Collaborate   more closely and effectively  with the private sector

2. Phase out  Protectionism,

3. Fight  corruption and cronyism  more  willingly

4. Avoid  State Capture  by  making  our Institutions  much more  Independent – like the  Macc, the Elections Commission and  the Judiciary  etc

5. Encouraging a  more open and free society, with the greater protection of   Human Freedoms and  Human Rights

6 Revise and Reform our economic Model to face  greater global competition on a Sustainable  basis  for a better future!

All these  Pillars and  more  need  to be  strengthened  to   become a more competitive  nation  which can hold  its  head  high as  we  used  to do  more  confidently in the past !
This  WEF Report  could  indeed  be a Blessing  in Disguise  – if we   take it as a warning  to do more  to stop the  decline in our global competitiveness !
I hope  we take heed of this  warning and act  accordingly  with a stronger political will !
We also hope  that the  Budget  2017 will take into account  the  findings of  the WEC Report on Competitiveness, as well as  some of  the above  ideas and those from others,  to make the Budget  2017 really meaningful!
Tan Sri Ramon Navaratnam