21 July 2025

KUALA LUMPUR: Malaysia's rise in the IMD World Competitiveness Ranking 2025 was driven by its electrical and electronics (E&E) sector and regulatory efficiency reforms.

The Malaysia Productivity Corporation (MPC) said the improved standing reflects sustained industrial momentum and government-led efforts to create a more business-friendly environment.

A key initiative is the Industrial Green Lane (IGL), which expedites development and licensing approvals for industrial projects.

"Malaysia's improved competitiveness reflects not just industrial strength, but regulatory transformation on the ground," MPC director-general Datuk Zahid Ismail said in a statement.

"Through IGL, we are enabling faster, cleaner and more predictable approvals, essential for investment, productivity and growth."

The IGL model streamlines approvals via simultaneous technical briefings, fast-track licence processing and licence issuance within 24 hours of the certificate of completion and compliance.

This approach has generated RM0.5 billion in local authority revenue, created 20,000 jobs and facilitated billions in investments.

Last year, Malaysia approved RM378.5 billion in total investments, including RM120.5 billion in the manufacturing sector.

"The E&E industry led the way with RM55.8 billion, making it the largest sub-sector, supported by 73.8 per cent of foreign direct investment. These outcomes align with the National Semiconductor Strategy and the New Industrial Master Plan," MPC said.

However, issues like Customs efficiency, trade transparency and documentation handling remain hurdles to export growth.

MPC said reducing non-tariff measures and improving trade facilitation are critical for enhancing export competitiveness.

"The E&E Productivity Nexus, alongside national agencies, is addressing these challenges through digital adoption, artificial intelligence and Internet of Things-driven energy efficiency and regulatory coordination.

"There is also continued emphasis on helping small and medium enterprises adapt to global standards. The government aims to expand IGL implementation nationwide, improve logistics infrastructure and drive data-driven regulatory reforms."

Source: New Straits Times, Lumi News, Dagang News, Berita Harian, Pick@Stock, KLScreener, BFM89.9