Datuk Seri Mustapa Mohamed
KUALA LUMPUR: Malaysia remained in the top 25 among 190 global economies this year in the latest World Bank’s Doing Business report, with a favourable business climate, said the Ministry of International Trade and Industry (MITI).
At 24th position, the country is ranked marginally lower than the 23rd spot attained last year.
“Despite the slight decline, Malaysia actually recorded an improvement by 0.96 in terms of an overall distance to frontier (DTF) score, from 77.47 in the previous year to 78.43 this year.
“The drop in the ranking was a result of reforms undertaken by the United Arab Emirates, translating to an increase in the distance of frontier score of 1.87 and enabling it to leapfrog from 26th in 2016 to a ranking of 21st this year, MITI said in a statement today.
The World Bank Doing Business 2018: Reforming to Create Jobs report, is the 15th in a series of annual reports measuring regulations affecting 11 areas of the life of a business.
Ten of these are included in this year’s ranking, namely the ease of doing business, starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
It also measures labor market regulations, which has not been included in the rankings.
The report covers data collection from June 2, 2016 to June 1, 2017.
Overall, the reports ranks New Zealand as the most business-friendly in the world, ahead of Singapore and Denmark, followed by South Korea and Hong Kong.
Within ASEAN, Malaysia was ranked second after Singapore and ahead of economies such as Thailand (26th), Brunei (56th) and Vietnam (68th). Meanwhile, in Asia, Malaysia was ranked among the top five after Singapore, South Korea, Hong Kong and Taiwan.
MITI Minister, Datuk Seri Mustapa Mohamed said although Malaysia dropped a spot, there was some success in the business regulatory reforms singled out by the World Bank, including strengthened access to credit through the new Companies Act 2016 that established a modern collateral registry.
“The World Bank also applauded Malaysia’s strengthened minority protection by requiring greater corporate transparency, placing us as the fourth best country for protection of minority investors.
“It also said that we have improved infrastructure facilities at Port Klang which has eased the handling processes at the terminal and facilitated import and export processes,” he added.
He said the ministry noted that there was room for improvements as indicated by the World Bank, for example, under the “Starting a Business” indicator, the Companies Act 1965 was completely overhauled last year.
“We removed several requirements which had made the incorporation process complicated in the past, especially for small and medium enterprises,” he explained.
Moving ahead, Mustapa cautioned that despite an improvement in the scores, the slight drop in the ranking indicates that other countries had been successful in implementing deeper reforms at so much faster pace.
“We need to do more and move faster in pushing through further reforms to improve our business regulatory environment,” he said. – Bernama