KUALA LUMPUR: THE World Bank has ranked Malaysia 18th out of 189 economies for ease of doing business, up two notches from last year, and ahead of countries such as Taiwan (19th), Switzerland (20th) and Japan (29th).
The World Bank’s Doing Business 2015 Report, released yesterday, showed the top three performers were Singapore, New Zealand and Hong Kong. Bernama reports that Malaysia ranked first among emerging east Asian economies.
A new method was used for the ranking because of limitations in the previous mechanism, such as loss of information, inability to track progress and inequality in business friendliness measured in larger countries.
The ranking is now based on the distance to frontier (DTF) score — score of country that is ranked No. 1 — rather than the percentile rank. Malaysia’s score edged up to 78.83 points from last year’s 76.84 points.
The report looked at 10 areas: 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.
Three areas that Malaysia ranked highly were fifth for protecting minority investors, 11th for trading across borders and 13th for ease of starting a business.
Some of the areas that the country needs to improve on will be addressed at the next Special Task Force to Facilitate Business meeting next month. They are in registering property, getting credit and enforcing contracts.
“There will be a decision made on how we are going to come up with measures and solutions to address the issues,” said Malaysia Productivity Corporation director-general Datuk Mohd Razali Hussain as he chaired a video conference with the Washington-based World Bank here yesterday.
While some areas scored lower using the new DTF method, World Bank senior country economist for Malaysia, Frederico Gil Sander, said the lower scores did not mean a sudden decline in performance.
“There is no deterioration in some of the areas’ performances, for example, in getting credit. It is the case that different things are being added to the evaluation, now,” Sander said after the video conference.
Support from local industry players was encouraging, as many view the new method positively for its holistic approach, which enables improvements to the regulatory environment.
“Our target is to reduce the approval period for construction permits to just 30 days in the near future,” said Federation of Malaysian Manufacturers president Datuk Saw Choo Boon.
Currently, obtaining construction permits takes 74 days, down from the previous 130 days.
In the 2015 report, Malaysia has improved in five of the 10 areas surveyed by the World Bank.
For starting a business, Malaysia recorded the closest DTF for starting a business indicator, with a score of 94.90, against New Zealand’s 99.96.
The time required to start a business in Malaysia has been reduced to 5.5 days, from six days previously, while on cost, which refers to percentage of income per capita, it has been reduced to 7.2 per cent from 7.6 previously.
On dealing with construction permits, the number of procedures was reduced to 13 from 15.
On getting electricity, cost (percentage of income per capita) in Malaysia reduced from 49.1 per cent to 46.3 per cent.
On registering property, it now takes 13.5 days from the previous 14 days, and on resolving insolvency, it now takes one year from 1.5 years previously, while recovery rate (cents on the dollar) improved to 81.3 from 48.9.