Wednesday, October 30, 2013

Malaysia 6th Most Business-Friendly Country: World Bank

KUALA LUMPUR (Oct 30, 2013): Malaysia, which moved up six spots to be ranked No. 6 among 189 economies in the latest World Bank's Doing Business Report 2014, reported its weakest performance in dealing with construction permits and resolving insolvency.

The 11th edition of the Doing Business Report measures business regulations for local firms, with a focus on small and medium-size companies operating in the largest business city of an economy or in Malaysia's case, Kuala Lumpur.

The report based its quantitative indicators on 10 areas of business regulation – starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

The Special Task Force to Facilitate Business (Pemudah) said while the two areas remained the weakest link, they have made improvements since the last report.

Malaysia saw improvement in its global ranking for dealing with construction permits in the 2014 report, ranking 43rd from 96th in 2013, while its performance in resolving insolvency improved to 42nd position this year from 49th position in 2013.

Pemudah attributed the improvements to the strengthening of one-stop centres (OSC) and the streamlining of procedures to facilitate the construction process.

On resolving insolvency, a "focus group resolving insolvency team" is continuously holding industry surveys and mapping exercises to determine the preferred mode of resolving insolvency based on the hypothetical case given by the World Bank.

Pemudah also said a thorough review of the regulatory and non-regulatory procedures and processes had led to the introduction of OSC 1 Submission as a gateway for seeking approvals for construction of small-scale non-residential projects, leading to reduced number of procedures from 37 to 15 and time taken from 140 days to 130 days.

"The way forward is to roll out the "dealing with construction permits" framework to all localities, continuously monitor and evaluate its transformation and adapting best practices through international benchmarking," said Pemudah in a booklet entitled "Malaysia in Doing Business 2014" revealed at a press conference here yesterday.

Other improvements made were in the areas of starting a business, which went up 38 places to 16 for 2014, enforcing contracts, up 3 places to 30, and getting electricity, up 7 places to rank 21.

This year, the top three easiest places to do business are Singapore, Hong Kong and New Zealand.

"Overall, Malaysia is well-ahead of its target to be among the top 10 by 2015 by claiming its sixth position in 2014 compared with 12 last year," said International Trade and Industry Minister Datuk Seri Mustapa Mohamed in a statement.

"At sixth position, Malaysia has been placed in the same league as Singapore, Hong Kong, New Zealand, the US and Denmark. This ranking also places Malaysia ahead of economies such as South Korea, Norway, the UK, Australia and Finland," he added.

Malaysia and the UK continued to secure top ranking on ease of getting credit. Malaysia's ranking of first position in this area since 2007 is attributable to the country's strengths in reforms on legal rights of borrowers and lenders. The depth of Malaysia's credit information systems had resulted in enhanced effectiveness of collateral and bankruptcy laws in facilitating lending.

Malaysia has also been consistently ranked fourth in the world in the area of protecting investors since 2009 and in the area of trading across borders, Malaysia made a breakthrough to fifth position compared with 11th position a year ago.

The Doing Business 2014 report is the 11th in a series of annual reports published by the World Bank and the International Financial Corp investigating the regulations that enhance business activity and those that constrain it.

--TheSun

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