KUALA LUMPUR (Oct 28): Malaysia’s improvement in its ranking in the World Bank’s Ease of Doing Business 2020 Report to 12th from 15th in 2019 is a result of the goverment’s successful institutional reforms, says Finance Minister Lim Guan Eng today.
Its current ranking in the report — which is a measure of business regulations and its implementation in 190 countries — is Malaysia’s best since 2015, and is due to regulatory reforms that made starting a business and dealing with construction permits easier, Lim said in a statement.
In Asia, Malaysia, is considered by the World Bank as the 4th easiest place to do business in Asia after Singapore, Hong Kong and South Korea, compared to its 5th spot previously.
Meanwhile, Malaysia is among the most improved country in the latest World Bank’s Worldwide Governance Indicators for 2018, again “thanks to wide-ranging institutional reforms carried out by this government”, Lim noted.
The WGI, he explained, measures institutional quality across 214 countries by accounting for six dimensions: accountability, political stability, government effectiveness, regulatory quality, rule of law and corruption. With the exception of regulatory quality, which was unchanged, Malaysia improved in all other dimensions.
These twin positive indicators, Lim said, will play a critical role in keeping Malaysia’s sovereign credit ratings high at A3 or A-.
“In determining sovereign credit ratings, international credit rating agencies take into
account various factors including fiscal conditions, economic conditions and institutional quality of a country. Indeed, credit rating agencies use both the Ease of Doing Business and the WGI in ascertaining a country’s institutional quality, and therefore credit ratings.
“Malaysia’s reaffirmation of its sovereign credit ratings is the best answer to critics that the present government does not know how to manage the economy or has increased government debts excessively,” Lim said.
The government, he reiterated, remains committed to implementing its institutional reforms, while supporting economic growth in line with the overall Shared Prosperity Vision 2030.