The Geneva-based organisation, which assesses the competitiveness landscape of 140 economies, ranked Malaysia at 25. Last year’s report placed Malaysia at the 18th spot.
Considered the most comprehensive assessment of national competitiveness worldwide, the WEF’s GCR uses 12 pillars of competitiveness to derive the status of a country pertaining to factors which drives its productivity and prosperity.
In terms of score, Malaysia’s performance came down from 5.23 to 5.16 out of a maximum of seven.
The report was released yesterday by the Malaysia Productivity Corporation (MPC).
MPC Director-General Mohd Razali Hussein spoke to the media at the event, saying that the country did lose some ground this year, but “Malaysia continues to lead the region among emerging economies”.
“Some of the data presented to the WEF may not have been comprehensive,” he said, adding that it could be a factor for the “unpredicted drop in rankings”.
The 12 pillars of competitiveness used for tabulating the ranking of a country’s economy are Institutions, Infrastructure, Macroeconomic Environment, Health and Primary Education, Higher Education and Training, Goods Market Efficiency, Labour Market Efficiency, Financial Market Development, Technological Readiness, Market Size, Business Sophistication and Innovation.
In these areas, the report takes statistical data from internationally recognised organisations based on 34 indicators, and this contributes to 30 per cent of the score.
The balance of 70 per cent, or 84 indicators, is derived from qualitative assessments that are taken from the WEF’s Executive Opinion Survey.
Meanwhile, International Trade and Industry Minister Mustapa Mohamed said it was important to note that all countries ranked above Malaysia were developed and high-income economies.
“Malaysia’s rankings were affected by external factors like the ringgit’s performance against the US dollar.
“The global economic uncertainty, the strong US Dollar, the fall in commodity prices and the slowdown in China’s economy are beyond our ambit,” Mustapa said in a statement following the release of the report.
He also blamed the drop in Malaysia’s ranking on the “false news” which was spread about Malaysia, thus developing a negative perception towards the country.
“There is also the issue of perception due to irresponsible acts of certain parties which continue to spread unfounded and baseless allegations about domestic political developments and the state of our economy.
“The fact is Malaysia remains politically stable and the economic fundamentals remain strong. This perception issue must be taken seriously and the Government will continue engaging with various stakeholders to address it,” Mustapa said.
The report also showed that Malaysia was ranked above South Korea, Iceland and China but below Belgium, Austria, Luxembourg, France, Australia, Ireland and Israel.
Other countries that also dropped in the rankings were Thailand, Indonesia, the Philippines, Japan, Hong Kong, Canada, France, Germany and Finland.
Switzerland remained the most competitive economy in the world for the eighth consecutive year, ahead of Singapore and the United States, followed by the Netherlands and Germany.
Mustapa said Malaysia would continue to embrace innovation as that was the name of the game.
“Several strategies, which are being implemented to promote innovation at enterprise and societal levels under the 11th Malaysia Plan, are expected to enhance the national innovation ecosystem.
“Hopefully, this will help us to improve our ranking in the coming report,” Mustapa added.
Moving forward, Mustapa cautioned that the competition would become more intense in the years ahead as all countries are working towards lifting their competitiveness.