KUALA LUMPUR: Delays in the implementation of targeted subsidy rationalisation were a factor for Malaysia slipping in the World Competitiveness Ranking (WCR) 2024, said Datuk Seri Anwar Ibrahim.
"If you look at the finer details of the report, among the strong caution why we slipped in the ranking was because of delays and being not stern in implementing the targeted subsidy," the Prime Minister said when replying to a question by Datuk Adnan Hamimi Taib Azamudden (Perikatan Nasional-Alor Setar) in Dewan Rakyat on Tuesday (June 25).
He cited Indonesia and Thailand as examples where they had fared better than Malaysia in the rankings because both countries had taken drastic steps to address the costs of subsidised items such as flour, rice and sugar.
"Our subsidies were deemed as unrealistic economic prescription because prices of goods were lower compared to market prices," he said.
He noted the situation was further compounded because the government had to incur additional expenditure to provide several aid packages to rakyat owing to the economic situation.
He said this was done despite an increase in government expenditure and a ballooning deficit.
"We had to think of the interest of the rakyat and were forced to provide for them which led to weaker performance," he said.
He noted that the WRC report was on analysis by the Institute for
Management Development (IMD) was based on quantitative data in 2023 and 2022 while the perception data was gathered between February and April this year.
He said this was because the nation's post-Covid economic growth was at 8.9% of the GDP in 2022 compared to a gradual growth of 3.7% in 2023 while the ringgit had also weakened.
However, Anwar noted that there have been signs of improvement in the economic growth and strengthening of the Ringgit in the first quarter of this year.
"Based on estimations of the first quarter of 2024, we will be able to fare much better on the report," he said.
However, Anwar acknowledged that there was still room for improvement, saying that he would bring the WRC report up for discussion in the Cabinet.
"We take an open approach and if there is constructive criticism to improve, we will do it.
"We will not take a too defensive stand if there are weaknesses that could be improved on," he said.
Overall, Anwar noted that the WCR still maintains Malaysia as a stable economy.
Malaysia slipped seven places to 34th out of 67 countries in the competitiveness ranking.
The nation also slipped four places to 10th out of 14 countries in the Asia-Pacific region, marking the first time Malaysia ranked lower than Indonesia and Thailand.
