Wednesday, October 12, 2011

Malaysia ranked 78th in global economic freedom

KUALA LUMPUR: Malaysia has dropped one place to rank 78th on economic freedom in the Economic Freedom of the World: 2011 Annual Report, in line with the decline worldwide and mainly due to the size of the government.

The report by the Institute for Democracy and Economic Affairs (IDEAS) was launched here yesterday at the Economic Freedom Asia Conference 2011. “Last year, we ranked 77th but this year we dropped one place to 78th. Actually, Malaysia’s ranking has been falling for several years and this is a worrying trend,” the chief executive of IDEAS, Wan Saiful Wan Jan said in a statement.

He pointed out that the country had scored zero under the sub-category of “Government Enterprises and Investments”.

This he said, showed the level of the government’s involvement in the economy through government-linked investment companies and government-linked companies (GLCs), was very worrying. “Since 1995, the size of the government had been on the increase,” he added.

The annual peer-reviewed Economic Freedom of the World Annual Report is produced by the Fraser Institute, Canada’s leading public policy think-tank, in cooperation with independent institutes in 85 nations and territories. 

The partner in Malaysia is IDEAS.

From 2006 up to 2011, Malaysia ranked 53rd, 60th, 72nd, 66th, 77th and 78th, respectively. (The 42 different index, measures economic freedom from a scale of 0 to 10, with 0 being the lowest and 10 the best)

Meanwhile, from 2006-2011, Singapore maintained a second ranking throughout, while Indonesia was ranked 83rd,86th,101th,93rd,90th,84th respectively, Thailand 60th,60th,56th,59th,58th,65th respectively and Vietnam at 88th,97th,108th,101th,105th and 88th.

Wan Saiful said Malaysia did well in the field of “Regulation of Credit, Labour and Business” and it had been improving in this area since 1980.“It is good that the government already acknowledges the need to rationalise its involvement in the economy, and there are plans to divest its holdings in various GLCs as well as liberalise different sectors.“This is urgent and it must be reformed now,” he added.

The studies conducted for the Index showed a clear linkage between economic freedom, prosperity and gross national income (GNI).

The report notes that among the highest-ranked countries, the average per capita annual income of the poorest 10 per cent of people was US$8,735 compared to US$1,061 for those living in the least economically free countries.

The full report is available for free download from — Bernama

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