Is Malaysia really headed for bankruptcy?
Jason Chin, Free Malaysia Today
There is much speculation these days about the financial health of the country. Restaurants, bars and coffee parlours are buzzing with discussions on the alleged ‘misappropriation of funds’. Some predict that Malaysia will soon be bankrupt like Greece. Public sector personnel worry about how “alleged misappropriation “will affect their jobs and the salaries they draw.
Regardless of how such fears came about and which quarters may have instilled them, the big question remains “Should we be afraid? Is Malaysia headed towards bankruptcy?”
6th in BPI
Malaysia is ranked 6th on the Baseline Profitability Index (BPI) for the year 2015. The BPI, published by the Foreign Policy Magazine, ranks markets for foreign investment based on asset growth, preservation of value, and repatriation of capital. This 6th place ranking among 110 countries across 6 continents reaffirms Malaysia as an attractive investment destination for foreign investors.
Contrary to popular belief Malaysia actually moved up 5 spots compared to its position in 2014. Malaysia and Singapore are the only two ASEAN countries in the top 10 of this highly prestigious ranking.
Growth in GDP
When we consider the Gross Domestic Product (GDP), the Malaysian economy advanced by 5.60 percent in the first quarter of 2015 compared to the same quarter last year. The current GDP growth in Malaysia is above forecast and Trading Economics expects the Malaysian GDP to remain on a steady growth path, even amid falling oil prices.
Simply put, If GDP is rising, the economy is good and the nation is moving forward. If GDP is falling instead, the economy is in trouble and the nation is losing ground.
Global Competitiveness Report
The World Economic Forum’s annual Global Competitiveness Report was recently released. It evaluates the efficacy of 144 of the world’s governments on measures such as wastefulness of government spending, burden of regulation and transparency of policy making, to produce an overall global ranking. Malaysia is ranked 8th in this ranking by the World Economic Forum.
Malaysia is given a ‘satisfactory’ position with regards to the ethics and corruption index component. The World Economic Forum acknowledges that the region is plagued by corruption and red tape, but goes on to praise Malaysia as a ‘stand out country’ in this region as they have noted the country to be relatively successful at tackling both these issues as part of its regular economic and government transformation programmes.
