Author: World Bank
This report, published in November 2009, examines the quality ofMalaysia’s investment climate. It is based on a survey of over 1,400 firms in both manufacturing and services. The report—based on data as of early 2008—provides an update to an earlier investment climate assessment conducted in 2003.
Some of the key conclusions:
- Overall,Malaysia’s investment climate compares favourably with other countries at similar levels of income.
- Yet, Malaysian do better on a number of fronts. Firms are concerned about skill shortages, tax regulations/rates, bureaucratic burdens and lack of business support services. These concerns have remained roughly unchanged.
- The intensity of concerns did change in a few dimensions. Firms are more concerned now about skills and education, crime and theft, and anti-competitive practices.
- These investment climate constraints significantly reduce the productivity of firms. The skills shortage, for example, forces firms to hire workers without the appropriate skill set and reduces the capacity of firms to innovate.
- Improving Malaysia’s investment climate further could yield large benefits. Liberalizing foreign equity constraints, for example, could raise productivity by 40 percent.