Malaysia’s global competitiveness ranking was reported to have dropped three positions to 24 from the previous year’s No. 21, according to the World Economic Forum’s (WEF) Global Competitiveness Report for 2009-2010 released in Dalian, China. Malaysia’s drop in WEF global competitiveness rankings to No. 24 threatens to undermine and disrupt Vision 2020 of transforming Malaysia into a developed nation with a per capita income of USD 12,000 by 2020 from the present USD7,000.
Prime Minister Datuk Seri Najib Tun Razak had recently said that Malaysia needs to achieve an annual growth of 8% annually(considered impossible under current global recession) for the next 10 years if Malaysia is to achieve Vision 2020. Even a high 6% annual growth for the next 10 years will delay the attainment of developed nation status by 10 years to 2030.
The decline in competitiveness will not help and clearly make Vision 2020 an impossible dream. Amongst the reasons for Malaysia’s drop was the lack of public safety and security, a much poorer assessment of its institutional framework and the growing budget deficit of 5% of GDP in 2008 and 7.6% of GDP in 2009.The Malaysian government must closely study and analyse this drop in competitiveness and take bold steps to arrest the decline.
Malaysia policy makers should heed the advice of the WEF Global Competitiveness Report that in order to maintain its competitive edge, Malaysia now needed to prepare its conversion into a knowledge-based, innovation-driven economy. Malaysia must also improve both the quantity and quality of higher education and boosting technological readiness, particularly information and communications technology penetration.
The Penang state government is adopting this advice by taking steps towards a high income economy based on innovation, creativity and high value shifting our reliance based on low-cost labour to high technology and modern services sector dependant upon highly paid and skilled workers. As a start, the proposed 200 acre Education Hub in Balik Pulau together with the expansion of the existing PSDC would serve as an incubator to develop knowledge, skills and human capital.
Building institutions such as good governance based on CAT, respect for the rule of law, a clean and efficient civil service as well as a high degree of public-private co-operation is an important step. Equally important to training talent is also retaining talent. This requires branding Penang as reliable, high quality and sustainable. That is the reason for our vision of transforming Penang into an international city with world class facilities that works and becoming the first state that provides free wifi service and is a green state.
Despite our lack of natural resources, I believe in the energy, expertise and entrepreneurship in the people of Penang to make this vision of an international city possible. We offer Singapore investors an unique choice to participate in Penang’s effort of wealth creation based on opportunities for growth, social equity by economic expansion and social inclusiveness by treating people not as shades of colours but as human beings.