Malaysia ranks 21 amongst 155 economies on ease of Doing Business

The Doing Business report is an annual survey published by the World Bank’s private sector arm, the International Finance Corporation (IFC). It looks at the correlation between government regulation and the ease of Doing Business across the globe. As such it provides a measure of economic freedom within, as well as amongst, various economies and so far has already become a useful tool for promoting a better business environment since its first publication three years ago.

The report is a time and motion study that tries to measure the actual Life Cycle of Doing Business across the world, providing comparative data across countries. So how does Malaysia fare in the Doing Business 2006 report? Malaysia ranks fairly high overall, coming in at place 21 out of 155 economies. In some areas, namely the ease of getting credit and investor protection, it does exceptionally well ranking in the top 10 global economies. The fact that there are no minimum deposit requirements for starting a business also reflects very well on the country.

However, in stark contrast to this outstanding performance in terms of dealing with licenses, Malaysia is placed at rank 101. This is due to the fact that the cost in time of “complying with licensing and permit requirements for ongoing operations” in the country adds up to 226 days, whereas in the OECD average is only 150 days and that of the region a similar 153 days. The picture is even worse when it comes to the amount of time needed for registering property, as it takes more than twice as long to do this in Malaysia (143 days) as in other countries in the region (60 days), and more than 4 times as long as the OECD average (33 days).

As for the region of East and Southeast Asia, which currently provides the best environment for investors after the OECD, the report is concerned that the region is now reforming too slowly, when compared with Eastern Europe, Latin America, the Caribbean, South Asia and the OECD countries. If deregulation is not prioritized the region, including Malaysia, risks falling behind other countries that are continually simplifying regulations to create a better environment for “Doing Business”.

For further information or a full copy of the Doing Business 2006 report, please refer to the IFC site http://www.doingbusiness.org