Malaysia's ranking drops in 'ease of doing business' list

Luqman Hariz
November 1, 2017 15:48 MYT

Reforms undertaken by Malaysia sent a strong signal of its commitment to reduce regulatory burden to ensure the laws will encourage, instead of hinder, enterprises especially SMEs, to do business in this country. - Photo for illustration purpose

Malaysia’s ranking in the World Bank’s 2018 'ease of doing business' list has dropped one place to the 24th.

This is despite the country’s overall score improving to 78.43 from 77.47 last year.

The World Bank’s Doing Business Report measures how easy it is for entrepreneurs to start and operate a business in a country, based on a few criteria.

These include starting a business, getting construction permits, getting electricity, registering property and getting credit, amongst others.

The World Bank however, did note the recent initiatives taken by the government to ease business, including reforms to strengthen credit access, protecting minority investors and improving trade across borders.

In response, the International Trade and Industry Ministry said today, one of the reasons behind Malaysia’s drop this year is the United Arab Emirates' (UAE) leapfrogging of a few countries in the list.

“The drop in ranking was a result of reforms undertaken by the UAE translating to an increase in (distance-to-frontier) DTF score of 1.87, enabling them to leapfrog from 26th last year to a ranking of 21st this year,” it said in a statement.

The ministry said, the determining of the ranking also relies on data that are subject to change.

“These data come in the form of responses to the questionnaires, conference calls, written correspondence and visits by the World Bank team.

“These data are subjected to numerous rounds of verification which could lead to revisions or expansions of the information collected,” it added.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed also reiterated and applauded the reforms undertaken by the government in recent years.

“A total of 23 reforms was undertaken by Malaysia over the last 15 years, higher than the average of 15 reforms undertaken by countries in the East Asia and the Pacific region.

“These reforms sent a strong signal of Malaysia’s commitment to reduce regulatory burden to ensure our laws will encourage, instead of hinder, enterprises especially SMEs, to do business in our country,” he said.

Malaysia ranks second in ASEAN after Singapore, and fifth in Asia after the island-nation, South Korea, Hong Kong and Taiwan.

New Zealand secured the top spot in the list, with Singapore and Denmark in second and third respectively – an order unchanged from last year’s list.

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