Talent is M'sia's competitiveness 'Achilles Heel', says economist

Developing and retaining and skilled workforce remains a key weakness in Malaysia’s ability to attract investment, according to economist Apurva Sanghi.

He said this in response to the debates surrounding Malaysia’s fall in the International Institute for Management Development’s 2024 World Competitiveness Ranking from the 27th position to the 34th, out of 67 countries evaluated worldwide.

“But the notion that investors use these rankings to make investment decisions is a bit naïve,” he posted on X today.

Speaking in his personal capacity, the World Bank’s lead economist on Malaysia listed the three most important factors that investors consider when choosing which country to invest in: Policy stability, the quality of its infrastructure, and talent.

He explained that investors value policy stability even more than political stability. Physical infrastructure is important but increasing weight is now being given to digital infrastructure.

“Malaysia’s Achilles Heel when it comes to investment remains talent!” he concluded.

Previously, Apurva has also blamed Malaysia’s declining competitiveness as the root cause of the ringgit’s slide compared to other currencies, although external factors also played a role.

All down to fundamentals

Meanwhile, to a question from another X user on what sectors should Malaysia be competitive in, Apurva called for a return to basics by focusing on foundational skills and creating a workforce that can think creatively, critically, and collaboratively.

“Then, selecting skills for specific sectors - whatever they may be - becomes easier. Foundation is (almost) everything!” he said.

The World Competitiveness Ranking ranks countries based on measures such as tax policy, labour market, education, employment, prices, management practices, and finance. These are in turn grouped into four categories.

Malaysia has fallen in three out of four categories this year, namely economic performance (8th, from 7th last year), government efficiency (33rd, from 29th last year), and business efficiency (40th, from 32nd last year).

It remained on the 35th rank when it comes to infrastructure.

Perikatan Nasional chairperson Muhyiddin Yassin said the figures show Malaysia’s economy is not on the right track and called on Prime Minister Anwar Ibrahim to stop being a “master spinner” and focus on the economy.

Muda has also questioned the government’s silence on the rankings and urged it to respond.

'No real implications', economists say on competitiveness ranking drop

M'sia's ranking in competitiveness index set to improve - Zafrul

Ringgit extends losses to close lower against US dollar

Weak ringgit affected M'sia's IMD competitiveness ranking - Zafrul

COMMENT | Malaysia's bid for Brics and global economic balance

Muhyiddin jabs at 'master spinner' Anwar over rankings drop