KUALA LUMPUR: Malaysia's competitiveness has been on the downtrend for years and is not an overnight phenomenon, says a prominent economist.
Prof Tan Sri Noor Azlan Ghazali said the drop in Malaysia's competitiveness ranking was not caused by short-term factors including the country's economic performance in the past year, US interest rates or geopolitics.
"This downward trend is the result of the whole country not giving its full commitment to enact change.
"Not everything can be placed on the shoulders of the prime minister and the government of the day. We are all responsible."
The Universiti Kebangsaan Malaysia academic said while there was no need to panic over the latest International Institute for Management Development (IMD) competitiveness rankings, the downward trend was cause for concern.
In the recently published report, Malaysia's ranking in the competitiveness index dropped from 27th in 2023 to 34th in 2024.
He said competitiveness was not a reflection of a year's economic or currency performance, but rather structural elements including taxation, productivity, expertise, regulations, labour, infrastructure, education and more.
Noor Azlan, director of UKM's Malaysian Inclusive Development and Advancement Institute, said other factors include the quality of the business and investment ecosystem.
He said efforts to improve competitiveness require firm decisions and the commitment to see them through as it involves structural issues.
"This is our chance, the government, industries and the people to work together, to fix what is wrong and strengthen what is weak.
"This includes the burden of unsustainable fuel subsidies which threaten the country's fiscal position."
Yesterday, Bernama reported Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz attributed the drop in Malaysia's competitiveness ranking to the ringgit's weakness.
