Thursday, August 20, 2015
Malaysia is not all bad news
Salleh Said Keruak
The opposition and the critics of the government are painting a bleak scenario that Malaysia is on the verge of bankruptcy and that Malaysia is amongst the ranks of the failed states. In short, there is only bad news and no good news in Malaysia.
The World Bank, however, in its latest report ‘Doing Business 2015: Going Beyond Efficiency’ says that Malaysia continues to rank among the top 20 economies worldwide and first among emerging economies in East Asia on the ease of doing business.
In fact, Malaysia, which the year before ranked 20th globally, now ranks 18th.
The World Bank report shows that, since 2005, Malaysia has improved its business regulatory framework through 17 reforms in the areas measured by the report—compared with the global average of 12 reforms per economy in that period. Malaysia has therefore narrowed the gap with some of the best practices worldwide.
In June this year, the World Bank said that the introduction of GST and elimination of fuel subsidies has helped Malaysia weather the oil price shock, but further reforms are required to ensure medium-term fiscal targets are met.
Malaysia is a highly open upper-middle income economy, said the World Bank. Malaysia was one of 13 countries identified by the Commission on Growth and Development in its 2008 Growth Report to have recorded average growth of more than 7% per year for 25 years or more.
Economic growth was inclusive, as Malaysia also succeeded in nearly eradicating poverty. The share of households living below the national poverty line (USD 8.50 per day in 2012) fell from over 50% in the 1960s to less than 1% currently.
Malaysia’s near-term economic outlook remains overall favourable, said the World Bank, despite some risks. The economy has diversified from commodities and the Government has taken steps to broaden the revenue base. Short-term risks include further declines in oil prices and volatility in capital flows from the normalisation of US monetary policy.