KUALA LUMPUR: Malaysia’s rise in ranking from 74th placing to 58th in the Economic Freedom of the World (EFW) report has been viewed as a “big success” that reflected the government’s efforts in making the private sector the engine of growth.
The rankings were released today by The Institute for Democracy and Economic Affairs (Ideas) in conjunction with Canada’s Fraser Institute.
In a statement today, Ideas chief executive Wan Saiful Wan Jan said, “I am most pleased that Malaysia has improved tremendously in this EFW report. Leaping from the 74th place to 58th this year is a big success.”
The report, which is based on data from 2013 (the most recent year available), measures a country’s economic freedom (levels of personal choice, ability to enter markets, security of privately owned property, rule of law, etc.) by analysing the policies and institutions of 157 countries and territories.
Commenting on the ranking, he added, “Initiatives in the Economic Transformation Programme such as divestment of Government Linked Companies (GLCs) and liberalisation of service sectors may contribute to improving our score in this Index.”
While Malaysia’s score in most of the indicators had improved, he added, the country’s scores in five sub-indicators declined, among them, the legal enforcement of contracts.
This indicator measures the efficiency of the judicial system in resolving commercial disputes. “The decline shows that the time, cost and the number of procedures of the settlement process is getting less efficient and costly.”
Wan Saiful suggested, “If we want to keep this success, we must push ahead with liberalisation and not give in to the temptation of increasing the government’s role in the economy because the more the government is involved in the economy, the smaller the space and incentive for the private sector to grow and excel.”
Hong Kong has the highest level of economic freedom worldwide, with a score of 8.97 out of 10, followed by Singapore (8.52), New Zealand (8.19), Switzerland (8.16), United Arab Emirates (8.15), Mauritius (8.08), Jordan (7.93), Ireland (7.90), Canada (7.89), and the United Kingdom (7.87).
Other notable countries included the United States (7.73), Japan (7.52), Germany (7.50), Russia (6.69), China (6.44) and India (6.43).
The 10 lowest-ranked countries were Angola, Central African Republic, Zimbabwe, Algeria, Argentina, Syria, Chad, Libya, Republic of Congo, and Venezuela. Some countries such as North Korea and Cuba can’t be ranked due to lack of data.