Guan Eng: Malaysia’s improved ranking in doing business shows reforms a success

Finance Minister Lim Guan Eng speaks during a press conference at Parliament in Kuala Lumpur October 12, 2019. ― Picture by Firdaus Latif
Finance Minister Lim Guan Eng speaks during a press conference at Parliament in Kuala Lumpur October 12, 2019. ― Picture by Firdaus Latif

KUALA LUMPUR, Oct 28 — Malaysia’s improved ranking from 15th to 12th in the World Bank’s Ease of Doing Business 2020 Report is testimony to the Pakatan Harapan (PH) government’s success in reforming the country’s institutions, Lim Guan Eng said today.

The finance minister said the position was Malaysia’s best since 2015 and attributed it largely to changes in regulations that made starting a business and dealing with construction permits easier. 

“The Government remains committed to implementing its institutional reforms, while

supporting economic growth in line with the overall Shared Prosperity Vision 2030,” he said in a statement.

The Doing Business Report surveys regulations governing business activities in the economies which are then ranked according to their ease of doing business scores based on quantitative indicators of the regulations.

Malaysia also rose to fourth easiest place to do business in Asia after Singapore, Hong Kong and South Korea, a step up from the previous year when Malaysia ranked fifth.

Lim also said Malaysia was among the best improved economies in the World Bank’s 2018 Worldwide Governance Indicators (WGI) published earlier this month.

The WGI measures institutional quality across 214 countries by accounting for six dimensions: aAcountability, political stability, government effectiveness, regulatory quality, rule of law and corruption.

Lim said Malaysia improved in five out of the six dimensions compared to 2017’s score, with only regulatory quality unchanged.

He also said Malaysia’s positive performance in both indices will play a critical role in keeping Malaysia’s sovereign credit ratings high at A3 or A- as the latest WGI showed a strong credit positive in the evaluation of sovereign credit ratings.

“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,” he said.

Apart from Malaysia’s reaffirmation of its sovereign credit ratings, Lim said the domestic economy continues to exhibit resilience with Industrial Production Index growth accelerating from 1.2 per cent to 1.9 per cent year-on-year in August due to sustained manufacturing growth and recovery in mining output.

The September inflation rate was recorded at 1.1 per cent, a figure Lim said was conducive for private consumption expansion.

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