Malaysia

Malaysia’s change management ahead of curve, report shows

By Lee Wei Lian
April 27, 2012

Resistance from Malay hardliners has forced Najib to slow some of his reform initiatives. — File picResistance from Malay hardliners has forced Najib to slow some of his reform initiatives. — File picKUALA LUMPUR, April 27 — Malaysia was placed seventh out of 60 developing economies in a new ranking that assessed countries’ abilities to manage change and cultivate opportunity.

The Change Readiness Index, developed by KPMG International and UK based Overseas Development Institute, put Malaysia ahead of countries like Thailand (32), China (13), Indonesia (30) and Vietnam (49).

The Najib administration’s reform efforts made an impression on the developers of the index who noted that the country’s initiatives to tackle corruption and move into the high income bracket set it apart from its some of its Asean neighbours.

“While Thailand still has competitive strengths such as a large domestic market and good quality infrastructure, it appears slower in facing the new challenges of the world economy and demonstrates a more limited capability to build on its strengths and create new opportunities,” said the report.

“In contrast, Malaysia seems to be planning for a transition towards a high income, innovation-led economy going forward.”

The report also noted that the Malaysian government has been working to improve the business environment, fight crime and corruption and enhance infrastructure and transport.

Chile was ranked first in the index, followed by Tunisia and Taiwan.

The report said that some countries are better able to manage and mitigate the risks associated with change and capitalise on new opportunities than others, and that “change readiness: is likely to be a key determinant of a country’s ability to achieve sustained growth over time.

Prime Minister Datuk Seri Najib Razak had introduced various government and economic reform measures soon after taking over from Tun Abdullah Ahmad Badawi in April 2009, in a bid to push the country from its third-world status into a high-income bracket nation.

Government officials and some economists have pointed to Malaysia’s rise in rankings such as the World Economic Forum’s Competitiveness Index and the World Bank’s Doing Business Index last year as proof that Najib’s reforms are working.

However, pressure from Malay hardliners such as Perkasa and the Malay Economic Consultative Council (Mapem) is widely seen as to have dampened Putrajaya’s efforts, especially the New Economic Model (NEM) which had touched on meritocracy and a more competitive market.

Critics also say that Malaysia has to make up for lost time and should institute more widespread and sweeping reforms as it should be comparing itself with former peers like South Korea and Singapore instead of other developing countries.

Malaysia rose five spots to 21 in the World Economic Forum’s Competitiveness Index last year, but dropped four spots to 60 in Transparency International’s Corruption Perception Index from 2010.

While Najib has taken steps to increase the competitiveness of the country’s business environment as well as the effectiveness of the civil service via so-called transformation programmes, the wider public, however, had yet to be fully convinced of the transformation initiatives with many saying that they do not feel much — if any — difference in terms of their quality of life.

Among the highlights of the transformations include a new mass rapid transit system for the nation’s capital as well as measures to build more roads and schools in rural areas and combat crime.

Many members of the public say, however, that crime remains unacceptably high, purchasing power is too low, public transport too stressful and government tenders still too opaque.